[front cover]
MAY 31, 1999
SEMIANNUAL REPORT
- -----------------
AMERICAN CENTURY
[graphic of stairs]
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STRATEGIC ALLOCATION:
CONSERVATIVE
MODERATE
AGGRESSIVE
[american century logo(reg.sm)]
American
Century
[inside front cover]
Y2K TESTING EFFORTS PAY DIVIDENDS IN PREPAREDNESS
- --------------------------------------------------------------------------------
Y2K, short for the year 2000, refers more specifically to the date change from
December 31, 1999 to January 1, 2000. This date change is significant for
computers because many were originally programmed to process dates with
two-character years -- 99 instead of 1999.
When the calendar rolls to 2000, this can create problems for computers
programmed this way because they will read the date as "00," and may interpret
it as 1900. Most companies have been working to reprogram their computer systems
with four-digit years. Reprogramming is very labor-intensive and requires
testing to ensure that there are no errors and that all lines of code were
successfully changed.
Recognizing the possible impact of the Y2K issue, our senior-level Steering
Committee, programmers, business partners and Y2K team have been working
diligently to make January 1, 2000 a non-event for American Century investors.
Currently, all of our computer systems have been modified, tested and returned
to production. We have an ongoing commitment to testing our systems with our
vendors and business partners and within the industry throughout the rest of the
year.
In March and April of this year, we participated in the Security Industry
Association's (SIA) industry-wide test and successfully processed transactions
for dates up to and beyond 2000. American Century transactions with our partner
firms were processed free of Y2K bugs. We also participated in the Market Data
Test conducted by the SIA and Financial Information Forum in May. Again, the
computer scripts were executed successfully with no Y2K-related errors.
In addition to our testing schedule, our Y2K team has developed contingency
plans. These plans will minimize the impact on our investors and help us
maintain operations in the event of any Y2K-related incidents. We will conduct
practice drills of contingency scenarios during the rest of 1999 and refine
those plans to respond quickly and effectively so that the date change is as
seamless as possible for investors. We expect the year 2000 to be business as
usual at American Century.
Year 2000 Readiness Disclosure
[left margin]
STRATEGIC ALLOCATION: CONSERVATIVE
(TWSCX)
- ------------------------------------
STRATEGIC ALLOCATION: MODERATE
(TWSMX)
- ------------------------------------
STRATEGIC ALLOCATION: AGGRESSIVE
(TWSAX)
- ------------------------------------
Turn to the inside back cover of this report to see a list of American Century
funds classified by objective and risk.
MINIMIZE YOUR MUTUAL FUND TAX HIT
American Century's newest equity fund, Tax-Managed Value, is designed for
long-term growth and to minimize the tax hit you take on your mutual fund
investments each year. The fund is managed to keep taxable distributions to a
minimum by using the following strategies:
* BUY AND HOLD --Low portfolio turnover helps limit realized capital gains
and takes advantage of long-term capital gains tax rates.
* OFFSET GAINS --When gains are realized in the portfolio, they are offset
with capital losses from securities sold in that tax year or losses
carried over from previous years.
* SELL HIGHER-COST SHARES FIRST --Selling shares that cost the most first
helps minimize the taxable gains incurred from a sale.
Our Message to You
- --------------------------------------------------------------------------------
/photo of James E. Stowers III and James E. Stowers, Jr./
James E. Stowers III, seated, with James E. Stowers, Jr.
During the six months ended May 31, 1999, we witnessed some surprising
events in the U.S. financial markets. When we last addressed you in the annual
report for the American Century Strategic Asset Allocation funds, the Federal
Reserve (the U.S. central bank) had recently cut short-term interest rates to
bolster the U.S. economy and help stabilize markets worldwide. This came after
economic and financial crises in Asia, Russia, and Latin America, and the near
collapse of several hedge funds. The global economic outlook was still quite
uncertain.
But the Fed's actions helped turn things around. By January 1999, overseas
economies were stabilizing, the U.S. economy was posting strong growth, and
investor confidence had rebounded. Interest rates rose while the U.S. stock
market soared -- the benchmark 30-year Treasury bond yield closed above 6% for
the first time in a year and a half and the Dow Jones Industrial Average broke
through 10,000 in the first quarter and continued to climb in the second
quarter.
The year also began on an up note for us. We focused on making American
Century easier to do business with and helping investors reach their financial
goals. In March, we consolidated all our funds under the American Century name.
Though we are proud of the venerable Twentieth Century and Benham names, we
believe the change makes it simpler for you to identify your funds.
We also reclassified all 71 of our funds based on investment goals and risk
levels, so you can more easily choose the funds that are right for you. A
complete list of American Century funds, arranged by their new classifications,
is on the inside back cover of this report.
In addition, we enhanced our Web site (www.americancentury.com). There
you'll find daily fund information -- including performance and price data --
market and national news, and a Forms Center with access to the most-requested
investor forms and applications. You can also sign up to receive fund
prospectuses and shareholder reports electronically.
Finally, we continued to expand the American Century investment team, which
has doubled over the last three years. We're committed to building and
maintaining a talented management group.
As always, we appreciate your continued confidence in American Century.
Sincerely,
/s/James E. Stowers, Jr. /s/James E. Stowers III
James E. Stowers, Jr. James E. Stowers III
Chairman of the Board and Founder Vice Chairman of the Board and
Chief Executive Officer
[right margin]
Table of Contents
Report Highlights ...................................................... 2
Market Perspective ..................................................... 3
STRATEGIC ALLOCATION: CONSERVATIVE
Performance Information ................................................ 5
Management Q&A ......................................................... 6
Schedule of Investments ................................................ 9
STRATEGIC ALLOCATION: MODERATE
Performance Information ................................................ 20
Management Q&A ......................................................... 21
Schedule of Investments ................................................ 24
STRATEGIC ALLOCATION: AGGRESSIVE
Performance Information ................................................ 38
Management Q&A ......................................................... 39
Schedule of Investments ................................................ 42
FINANCIAL STATEMENTS
Statements of Assets and
Liabilities ......................................................... 55
Statements of Operations ............................................... 56
Statements of Changes
in Net Assets ....................................................... 57
Notes to Financial
Statements .......................................................... 58
Financial Highlights ................................................... 63
OTHER INFORMATION
Share Class and Retirement
Account Information ................................................. 69
Background Information
Investment Philosophy
and Policies ..................................................... 70
Comparative Indices ................................................. 70
Neutral Asset Mixes ................................................. 70
Investment Team
Leaders .......................................................... 70
Glossary ............................................................... 71
www.americancentury.com 1
Report Highlights
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MARKET PERSPECTIVE
* Surging U.S. growth and more stable economies overseas meant world stock
markets generally performed well, while bond returns were relatively poor in
the six months ended May 31, 1999.
* Among U.S. equities, value stocks outperformed growth, and small- and
mid-cap shares did better relative to large-cap stocks than in recent years.
* Foreign stocks performed relatively well after a difficult 1998. In general,
the worse a country's or region's performance last year, the better it has
done so far this year.
* An expanding economy and rising interest rates hurt domestic bond returns.
Corporate and mortgage-backed securities outperformed Treasury bonds.
* Healthier world economies and the strength of the U.S. dollar meant
relatively poor foreign bond returns for U.S. investors.
STRATEGIC CONSERVATIVE
* The portfolio's conservative mix of bonds, stocks, and cash produced
positive returns, though performance was limited by higher interest rates.
* We modestly overweighted bonds, adding higher-yielding corporate securities.
* We have a positive outlook for the global economy, which analysts expect to
grow at around 2.5-3.0% this year.
* We'll continue to modestly overweight U.S. stocks and bonds, likely
underweighting cash and foreign bonds.
STRATEGIC MODERATE
* The fund's return for the six months reflected the blended return of its
stock, bond, and cash portfolios, giving shareholders long-term capital
growth with relatively moderate share price volatility.
* We ran Strategic Moderate's portfolio close to its neutral asset mix, with
only a modest overweight in value stocks.
* We have a positive outlook for the global economy, which analysts expect to
grow at around 2.5-3.0% this year.
* We'll continue to modestly overweight value stocks going forward. Economic
growth overseas is expected to be better, so foreign stocks also look
attractive.
STRATEGIC AGGRESSIVE
* The fund's return for the six months reflected the blended return of its
stock, bond, and cash portfolios, giving shareholders long-term capital
growth in a single well-diversified investment.
* We ran Strategic Aggressive's portfolio close to its neutral asset mix, with
only a modest overweight in value stocks.
* We have a positive outlook for the global economy, which analysts expect to
grow at around 2.5-3.0% this year.
* We'll continue to modestly overweight value stocks going forward. Economic
growth overseas is expected to be better, so foreign stocks also look
attractive.
[left margin]
CONSERVATIVE(1)
(TWSCX)
TOTAL RETURNS: AS OF 5/31/99
6 Months 3.77%(2)
1 Year 5.74%
INCEPTION DATE: 2/15/96
NET ASSETS: $199.7 million(3)
MODERATE(1)
(TWSMX)
TOTAL RETURNS: AS OF 5/31/99
6 Months 6.14%(2)
1 Year 5.76%
INCEPTION DATE: 2/15/96
NET ASSETS: $313.4 million(3)
AGGRESSIVE(1)
(TWSAX)
TOTAL RETURNS: AS OF 5/31/99
6 Months 7.90%(2)
1 Year 5.32%
INCEPTION DATE: 2/15/96
NET ASSETS: $173.1 million(3)
(1) Investor Class.
(2) Not annualized.
(3) Includes Investor and Advisor classes.
Investment terms are defined in the Glossary on pages 71-72.
2 1-800-345-2021
Market Perspective from Jeff Tyler
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/photo of Jeff Tyler/
Jeff Tyler, senior vice president and lead manager of the Strategic Asset
Allocation funds
THE BIG PICTURE
There was a dramatic change in global financial markets in the six months
ended May 31, 1999. Looking back at 1998, crises in Asia, Russia, and Latin
America caused sharp volatility in world stock and bond markets. Only the U.S.
posted strong economic growth.
But by mid-1999, the rest of the world was catching up. Healthier world
economies meant much better stock market performance, but resurgent growth and
slightly higher inflation led to generally poor returns for bonds.
U.S. STOCKS
So far in 1999, U.S. stocks have performed reasonably well regardless of
size (see the table at right). That's in contrast to 1998, when small-company
stocks fell and shares of mid-sized companies rose only about half as much as
those of large companies. In April 1999, investors began to view big-company
stocks as too expensive, while mid- and small-company stocks looked undervalued
Similarly, value stocks (shares considered to be relatively inexpensive)
gained ground at the expense of growth stocks (companies with above-average
earnings growth). Growth stocks had been in favor during the past three years,
but that changed early in 1999.
For the six months, the S&P 500/ BARRA Value Index returned 13.60%,
outpacing the 11.44% return of the S&P 500/BARRA Growth Index. Most of the
performance disparity was focused in April, when the S&P 500/BARRA Value Index
was up 8.62%, compared with a 0.19% return for the S&P 500/BARRA Growth Index.
Another big U.S. stock story was sector rotation. It became clearer by
April that the global economy in general was regaining some strength, and
cyclical stocks (whose prices and earnings tend to follow the ups and downs of
the economy) made a comeback. To buy these cyclical stocks, investors sold
previous favorites such as high-tech and pharmaceutical stocks.
FOREIGN STOCKS
Foreign stocks bounced back after the turmoil of 1998 to produce positive
returns. For the most part, the worse a country's or region's stock market
performance in 1998, the better its returns so far this year.
Emerging market stocks are a great example of the phenomenon--after
plummeting last year, they've performed best so far in 1999. That's
because--with the exception of certain Latin American countries--most emerging
market economies have stabilized or bounced back sharply. For example, after
growing just 0.7% in 1998, Asian economies (excluding Japan) are expected to
grow a full 4% in 1999. That recovery has led to outsized gains in South Korean,
Indonesian, and other Southeast Asian stock markets.
Japan also appears to have stabilized. After contracting in 1998, Japan's
economy is expected to hold its ground in 1999. Record low interest rates and
prospects for better growth helped Japanese stocks post gains after years of
difficulty.
[right margin]
"HEALTHIER WORLD ECONOMIES MEANT MUCH BETTER STOCK MARKET PERFORMANCE."
U.S. STOCK MARKET PERFORMANCE
FOR THE SIX MONTHS ENDED MAY 31, 1999
S&P 500 12.59%
S&P MIDCAP 400 13.71%
S&P SMALLCAP 600 5.73%
FOREIGN STOCK MARKET PERFORMANCE (IN U.S. DOLLARS)
FOR THE SIX MONTHS ENDED MAY 31, 1999
MORGAN STANLEY EAFE(reg.tm) INDEX 4.01%
Morgan Stanley Europe Index 0.16%
Morgan Stanley Far East Index 15.51%
Morgan Stanley Emerging
Markets Latin American Index 17.77%
MORGAN STANLEY EAFE(reg.tm) INDEX
(IN LOCAL CURRENCIES) 9.75%
Source: Bloomberg Financial Markets and Lipper Inc.
Indices are defined on page 70.
www.americancentury.com 3
Market Perspective from Jeff Tyler
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(Continued)
European stocks benefited from mergers and acquisitions, as well as
interest rate cuts by the new European Central Bank. Lower rates and better
growth contributed to positive returns for these stocks, but weakness in the
euro, the new single European currency, limited returns for U.S. investors.
U.S. BONDS
U.S. bond returns were relatively poor for the six-month period--strong
economic growth translated into fears of future inflation and higher interest
rates.
The theme of dramatic change applies to the bond market as well. In late
1998, many analysts still thought that the Federal Reserve would have to cut
interest rates again to bolster the economy. But by the end of May, that view
changed 180 degrees--investors believed that the Fed would raise interest rates
to ward off inflation.
Treasury securities were the worst-performing domestic bond sector for the
six months. Treasurys had been the investment of choice in 1998 for those
worried about the health of global economies and capital markets. But as
economic and financial conditions improved, many investors sold Treasurys and
bought either stocks or higher-yielding corporate and mortgage-backed
securities.
Corporate and mortgage-backed bond returns were also limited by higher
interest rates; however, these bonds significantly outperformed Treasurys for
the six months. Continued economic strength and healthy corporate profits helped
boost the corporate bond market. Higher rates held one positive for the
mortgage-backed bond market--rising rates helped slow the record mortgage
refinancing wave that occurred in 1998.
FOREIGN BONDS
Foreign bond performance was mixed, but returns were generally poor for
U.S. investors because of the strength of the U.S. dollar. A stronger dollar
relative to foreign currencies means gains from investments overseas translate
back into fewer dollars.
The European Central Bank lowered interest rates in April to help stimulate
growth. Lower rates helped European bond returns; however, lower rates make the
currency, the euro, less attractive. As a result of lower interest rates and a
weaker economy than in the U.S., the euro was down more than 10% against the
dollar in the first five months of 1999.
Riskier emerging market bonds performed better in early 1999 after brutal
losses in 1998. The stabilization and recovery of global capital markets was key
to the rebound of these bonds. Investors bought these securities at bargain
prices in the belief that the worst was over.
Japanese bonds performed relatively well for the six months. Modest
progress on bank and economic reform helped returns. But again, the yen was
lower versus the dollar, limiting returns for U.S. investors.
[left margin]
"RESURGENT GROWTH AND SLIGHTLY HIGHER INFLATION LED TO GENERALLY POOR RETURNS
FOR BONDS."
U.S. BOND MARKET PERFORMANCE
FOR THE SIX MONTHS ENDED MAY 31, 1999
LEHMAN AGGREGATE BOND INDEX -0.76%
Lehman Treasury Bond Index -2.11%
Lehman Corporate Bond Index -1.47%
Lehman Mortgage-Backed
Securities Index 1.32%
FOREIGN BOND MARKET PERFORMANCE (IN U.S. DOLLARS)
FOR THE SIX MONTHS ENDED MAY 31, 1999
J.P. MORGAN NON-U.S.
GOVERNMENT BOND INDEX -4.55%
J.P. Morgan European Government
Bond Index -7.14%
J.P. Morgan Japan Government
Bond Index 1.23%
J.P. MORGAN NON-U.S.
GOVERNMENT BOND INDEX
(IN LOCAL CURRENCIES) 1.38%
Source: Lipper Inc. and Russell/Mellon Analytical
Indices are defined on page 70.
4 1-800-345-2021
Strategic Conservative--Performance
- --------------------------------------------------------------------------------
TOTAL RETURNS AS OF MAY 31, 1999
<TABLE>
INVESTOR CLASS (INCEPTION 2/15/96) ADVISOR CLASS (INCEPTION 10/2/96)
LEHMAN THREE-MONTH LEHMAN THREE-MONTH
STRATEGIC AGGREGATE U.S. STRATEGIC AGGREGATE U.S.
CONSERVATIVE S&P 500 BOND INDEX TREASURY BILL CONSERVATIVE S&P 500 BOND INDEX TREASURY BILL
====================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6 MONTHS(1) 3.77% 12.59% -0.76% 2.22% 3.56% 12.59% -0.76% 2.22%
1 YEAR 5.74% 21.04% 4.35% 4.62% 5.25% 21.04% 4.35% 4.62%
====================================================================================================================
AVERAGE ANNUAL RETURNS
3 YEARS 10.24% 27.07% 7.83% 4.98% -- -- -- --
LIFE OF FUND 9.52% 25.66% 6.72%(2) 4.99%(2) 10.17% 28.70% 7.56%(3) 4.95%(3)
</TABLE>
(1) Returns for periods less than one year are not annualized.
(2) Since 2/29/96, the date nearest the class's inception for which data are
available.
(3) Since 9/30/96, the date nearest the class's inception for which data are
available.
See pages 69-71 for more information about share classes, returns, and the
comparative indices.
[mountain graph - data below]
GROWTH OF $10,000 OVER LIFE OF FUND
Value on 5/31/99
S&P 500 $21,512
Strategic Conservative $13,637
Lehman Aggregate $12,352
Three-Month T-Bill $11,713
S&P 500 Strategic Lehman Three-Month
Index Conservative Aggregate T-Bill
DATE VALUE VALUE VALUE VALUE
2/29/96 $10,000 $10,000 $10,000 $10,000
3/31/96 $10,096 $10,044 $9,930 $10,041
4/30/96 $10,244 $10,145 $9,874 $10,082
5/31/96 $10,508 $10,186 $9,855 $10,125
6/30/96 $10,548 $10,222 $9,987 $10,167
7/31/96 $10,081 $10,038 $10,014 $10,211
8/31/96 $10,294 $10,160 $9,997 $10,254
9/30/96 $10,873 $10,441 $10,171 $10,297
10/31/96 $11,173 $10,585 $10,396 $10,339
11/30/96 $12,016 $10,831 $10,574 $10,382
12/31/96 $11,778 $10,772 $10,476 $10,425
1/31/97 $12,513 $10,876 $10,508 $10,469
2/28/97 $12,612 $10,814 $10,535 $10,513
3/31/97 $12,095 $10,636 $10,418 $10,558
4/30/97 $12,816 $10,761 $10,574 $10,603
5/31/97 $13,599 $11,117 $10,674 $10,648
6/30/97 $14,204 $11,384 $10,801 $10,691
7/31/97 $15,333 $11,828 $11,093 $10,736
8/31/97 $14,475 $11,640 $10,999 $10,783
9/30/97 $15,267 $12,051 $11,160 $10,827
10/31/97 $14,757 $11,899 $11,322 $10,871
11/30/97 $15,440 $12,008 $11,374 $10,919
12/31/97 $15,705 $12,154 $11,489 $10,966
1/31/98 $15,878 $12,200 $11,636 $11,012
2/28/98 $17,023 $12,567 $11,627 $11,058
3/31/98 $17,895 $12,872 $11,666 $11,105
4/30/98 $18,077 $12,918 $11,727 $11,150
5/31/98 $17,766 $12,895 $11,839 $11,197
6/30/98 $18,487 $13,031 $11,939 $11,243
7/31/98 $18,291 $12,961 $11,964 $11,289
8/31/98 $15,648 $12,284 $12,159 $11,335
9/30/98 $16,651 $12,646 $12,444 $11,378
10/31/98 $18,004 $12,881 $12,378 $11,416
11/30/98 $19,095 $13,140 $12,448 $11,458
12/31/98 $20,194 $13,434 $12,486 $11,501
1/31/99 $21,039 $13,482 $12,574 $11,542
2/28/99 $20,384 $13,116 $12,354 $11,585
3/31/99 $21,200 $13,364 $12,422 $11,628
4/30/99 $22,020 $13,758 $12,462 $11,669
5/31/99 $21,512 $13,637 $12,352 $11,713
$10,000 investment made 2/29/96
The graph at left shows the growth of a $10,000 investment over the life of the
fund, while the graph below shows the fund's year-by-year performance. The S&P
500, Lehman Aggregate Bond, and Three-Month U.S. Treasury Bill (T-Bill) indices
are provided for comparison in each graph. Strategic Conservative's total
returns include operating expenses (such as transaction costs and management
fees) that reduce returns, while the total returns of the indices do not. The
graphs are based on Investor Class shares only; performance for other classes
will vary due to differences in fee structures (see the Total Returns table
above). Past performance does not guarantee future results. Investment return
and principal value will fluctuate, and redemption value may be more or less
than original cost.
[bar graph - data below]
ONE-YEAR RETURNS OVER LIFE OF FUND (PERIODS ENDING MAY 31)
Strategic Lehman Three-Month
Conservative S&P 500 Aggregate T-Bill
DATE RETURN RETURN RETURN RETURN
5/96* 1.86% 5.04% -1.45% 1.25%
5/97 9.16% 29.48% 8.32% 5.17%
5/98 15.99% 30.68% 10.91% 5.16%
5/99 5.74% 21.04% 4.35% 4.62%
* From 2/29/96 (the date nearest the class's inception for which index data are
available) to 5/31/96.
www.americancentury.com 5
Strategic Conservative--Q&A
- --------------------------------------------------------------------------------
An interview with Jeff Tyler and Brian Howell, portfolio managers on the
Strategic Asset Allocation funds management team.
HOW DID STRATEGIC CONSERVATIVE PERFORM DURING THE SIX MONTHS ENDED MAY 31, 1999
Strategic Conservative returned 3.77% (see the previous page for additional
performance information).* That performance reflects the portfolio's
conservative mix of stocks (which performed well), bonds (whose returns were
limited by rising interest rates), and cash.
HOW IS STRATEGIC CONSERVATIVE MANAGED?
We manage Strategic Conservative to give shareholders regular income and
moderate long-term capital growth while providing some protection for principal
in a down market. To do that, we generally allocate 45% of the fund's
investments to bonds, 40% to stocks, and 15% to money market securities.
These weightings represent the portfolio's neutral position. We make modest
adjustments around these percentages to try and enhance performance.
HOW DID YOU POSITION THE FUND RELATIVE TO ITS NEUTRAL ASSET MIX OVER THE LAST
SIX MONTHS?
Our largest overweight was in the bond portion of the portfolio, where we
continued to add higher-yielding corporate securities (see the chart at left).
One way to measure the relative attractiveness of corporate bonds is to look at
the spread, or difference in yield, between corporates and Treasurys. The wider
the yield spread, the more attractive corporate bonds become. In late 1998, the
spread between corporates and Treasurys reached its widest level since the
recession of 1990. With the economy and corporate profits healthy, we simply
felt these values were too good to pass up.
DID YOU EMPHASIZE A PARTICULAR SECTOR OF THE CORPORATE BOND MARKET?
In general, we liked bonds issued by cyclical companies. Cyclical companies
are closely tied to the health of the economy, so their bonds tend to perform
best when the economy is strong. When fears of recession crippled the market in
the third quarter of 1998, these bonds were severely punished and experienced
sharp price declines. We used that opportunity to buy some of these securities
at attractive prices. As economic growth improved and investors once again
became interested in these bonds, cyclicals performed relatively well.
WHAT ABOUT THE PORTFOLIO'S FOREIGN BOND POSITION?
We modestly underweighted foreign bonds because we were concerned that the
strength of the U.S. dollar might hinder international bond performance. The
foreign bond markets that performed best were those of countries whose
currencies held up well versus the dollar. Good examples include bonds in the
U.K., Australia, Canada, and New Zealand. On the other hand, we were hurt by our
underweight in Japanese bonds, which performed reasonably well for the six
months.
* All fund returns referenced in this interview are for Investor Class shares.
[left margin]
"WE MANAGE STRATEGIC CONSERVATIVE TO GIVE SHAREHOLDERS REGULAR INCOME AND
MODERATE LONG-TERM CAPITAL GROWTH."
[pie chart - data below]
ASSET ALLOCATION
(AS OF MAY 31, 1999)
PERCENT OF FUND INVESTMENTS
U.S. Stocks 36%
U.S. Bonds 45%
Foreign Stocks 7%
Foreign Bonds 4%
Money Market
Securities 8%
See page 70 for the fund's neutral asset mix.
Investment terms are defined in the Glossary on pages 71-72.
6 1-800-345-2021
Strategic Conservative--Q&A
- --------------------------------------------------------------------------------
(Continued)
CAN YOU TALK A LITTLE BIT ABOUT STRATEGIC CONSERVATIVE'S STOCK HOLDINGS?
Sure. We added more mid-sized and value shares in the last six months,
putting less emphasis on bigger, higher-priced growth stocks. That's consistent
with what we've been saying for some time now--large-cap growth stocks were
trading at prices that were very expensive by historical standards. We felt the
fundamental variables we look at argued that value had a better risk/return
outlook than growth.
And while value stocks performed much better during the period than they
have in recent years, we might have been a little early on that trade--many of
these stocks underperformed large-cap growth stocks until April and May.
WHAT'S YOUR OUTLOOK FOR THE GLOBAL ECONOMY?
We have a generally positive outlook. Analysts expect global growth to come
in at 2.5-3.0% this year, compared with only about 1.5% in 1998. Also in
contrast to 1998, many think the U.S. will lag the rest of the world in 1999.
Better economic growth would lead you to expect higher stock prices. Because
world economies are so closely linked, more business overseas should also
benefit companies here at home.
ARE THERE ANY POTENTIAL RISKS TO THIS OUTLOOK?
Two issues we're watching carefully are inflation and the potential year
2000 (Y2K) computer problem. While it's impossible to predict the economic
impact of the Y2K problem, we are taking steps to measure the Y2K-readiness of
the issuers of the fund's portfolio securities. We'll also be keeping a close
eye on the financial markets as we get closer to year-end.
AND WHAT ABOUT THE RISK OF INFLATION?
A big reason the inflation rate fell to its lowest level in a dozen years
in 1998 was the weakness of the global economy. With growth rebounding this
year, inflation has begun to pick up, though it remains modest by historical
standards.
That brings us to the other reason inflation has declined throughout the
1990s--increased worker productivity. More productive workers explain why both
wages and corporate profits rose while inflation fell. However, it's uncertain
if productivity gains can continue at the same pace they have in the past.
Federal Reserve Chairman Alan Greenspan said as much when announcing his
intention to raise short-term interest rates to head off more serious inflation
down the road. But it seems that a vigilant Fed and the ability of the global
economy to produce more goods than there's currently demand for will keep
inflation from getting out of hand anytime soon.
[right margin]
FUND'S U.S. STOCKS (AS OF MAY 31, 1999)
NUMBER OF COMPANIES 447
DIVIDEND YIELD 1.59%
PRICE/EARNINGS RATIO 22.6
% OF FUND'S % OF
U.S. STOCKS FUND
TOP 5 U.S. STOCKS
FIRST VIRGINIA BANKS, INC. 1.9% 0.7%
MICROSOFT CORP. 1.8% 0.6%
BELLSOUTH CORP. 1.7% 0.6%
BANKAMERICA CORP. 1.7% 0.6%
SBC COMMUNICATIONS INC. 1.7% 0.6%
FUND'S FOREIGN STOCKS (AS OF MAY 31, 1999)
NUMBER OF COMPANIES 119
DIVIDEND YIELD 1.17%
% OF FUND'S % OF
COUNTRY FOREIGN STOCKS FUND
TOP 5 FOREIGN STOCKS
ROYAL DUTCH
PETROLEUM CO.
NEW YORK SHARES NETHERLANDS 3.3% 0.2%
MANNESMANN AG GERMANY 3.2% 0.2%
BP AMOCO PLC ADR U.K. 2.0% 0.1%
TELEFONICA S.A. SPAIN 1.9% 0.1%
VIVENDI FRANCE 1.9% 0.1%
[pie chart - data below]
PERCENT OF FUND'S FOREIGN STOCKS
Europe 78%
Asia/Pacific 17%
Americas
(excluding U.S.) 5%
www.americancentury.com 7
Strategic Conservative--Q&A
- --------------------------------------------------------------------------------
(Continued)
WHAT'S YOUR OUTLOOK FOR INTEREST RATES?
We've already seen a big increase in interest rates since the beginning of
the year, so we don't expect rates to go much higher. Instead, we think it's
more likely bond yields will trade in a relatively narrow range. Of course, that
assumes inflation doesn't increase dramatically and that the world economy
gradually improves.
GIVEN THIS OUTLOOK, HOW WILL YOU POSITION STRATEGIC CONSERVATIVE'S BOND
PORTFOLIO?
Strong growth and relatively stable rates make a very appealing environment
for corporate bonds. However, the outlook is somewhat clouded by Y2K. We think
the prudent thing to do is keep an eye on this situation and do our best to
position the portfolio to respond to the investment challenges and opportunities
Y2K might present.
AND HOW DO YOU EXPECT TO POSITION STRATEGIC CONSERVATIVE'S STOCKS?
We'll continue to modestly overweight stocks relative to our benchmark. In
U.S. equities, we think value shares continue to look like good buys. As a
result, our biggest bet in U.S. equities is likely to be in that area. With
economic growth overseas likely to be stronger, we also think foreign stocks
look very attractive. That means we'll probably overweight foreign stocks
relative to foreign bonds going forward.
[left margin]
"ANALYSTS EXPECT GLOBAL GROWTH TO COME IN AT 2.5-3.0% THIS YEAR, COMPARED WITH
ONLY ABOUT 1.5% IN 1998."
FUND'S U.S. BONDS (AS OF MAY 31, 1999)
NUMBER OF SECURITIES 116
WEIGHTED AVERAGE MATURITY 8.2 YEARS
AVERAGE DURATION 4.8 YEARS
[pie chart - data below]
PERCENT OF FUND'S U.S. BONDS
Corporate 38%
Mortgage-Backed 21%
U.S. Treasury 23%
Asset-Backed 7%
U.S. Govt. Agency 11%
FUND'S FOREIGN BONDS (AS OF MAY 31, 1999)
NUMBER OF SECURITIES 9
WEIGHTED AVERAGE MATURITY 8.9 YEARS
AVERAGE DURATION 6.1 YEARS
[pie chart - data below]
PERCENT OF FUND'S FOREIGN BONDS
Europe 71%
Asia/Pacific 22%
Americas
(excluding U.S.) 7%
8 1-800-345-2021
Strategic Conservative--Schedule of Investments
- --------------------------------------------------------------------------------
MAY 31, 1999 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS--43.0%
AEROSPACE & DEFENSE--1.2%
500 Alliant Techsystems Inc.(1) $ 42,500
1,200 Aviation Sales Co.(1) 46,200
800 Avondale Industries, Inc.(1) 29,200
11,600 Boeing Co. 490,100
5,300 Bombardier Inc. Cl B ORD 82,338
2,200 Cordant Technologies Inc. 106,700
1,200 EG&G, Inc. 35,625
1,500 General Dynamics Corp. 98,625
4,500 Goodrich (B.F.) Company (The) 182,250
11,400 Lockheed Martin Corp. 460,988
700 Newport News Shipbuilding Inc. 19,250
5,800 Raytheon Co. Cl B 394,762
5,100 United Technologies Corp. 316,519
------------
2,305,057
------------
AIRLINES(2)
400 AMR Corp.(1) 26,025
------------
AUTOMOBILES & AUTO PARTS--0.9%
1,600 Coachmen Industries, Inc. 35,200
9,800 Cooper Tire and Rubber Company 232,750
1,101 DaimlerChrysler AG ORD 94,948
629 Delphi Automotive Systems Corp.(1) 12,344
9,100 Ford Motor Co. 519,269
19,000 Fuji Heavy Industries Ltd. ORD 123,524
900 General Motors Corp. 62,100
800 Johnson Controls, Inc. 50,450
1,500 National R.V. Holdings, Inc.(1) 38,531
23,200 Superior Industries International, Inc. 578,550
------------
1,747,666
------------
BANKING--5.0%
4,600 Argentaria SA ORD 103,021
7,800 Australia & New Zealand Banking
Group Ltd. ORD 56,579
4,700 Banc One Corp. 265,844
18,400 BankAmerica Corp. 1,190,250
7,044 Bank of Ireland ORD 130,452
3,700 Barclays PLC ORD 112,160
9,800 Chase Manhattan Corp. 710,500
3,700 Citigroup Inc. 245,125
2,000 Deutsche Pfandbrief-und
Hypothekenbank AG ORD 172,997
1,900 Fifth Third Bancorp 129,616
12,300 First Union Corp. 566,569
26,600 First Virginia Banks, Inc. 1,321,688
21,800 KeyCorp 757,550
13,400 Mellon Bank Corp. 478,212
4,400 National Westminster Bank PLC
ORD 100,898
Shares Value
- --------------------------------------------------------------------------------
1,300 Northern Trust Corp. $ 117,650
6,500 PNC Bank Corp. 372,125
12,600 Regions Financial Corp. 477,619
1,000 Societe Generale Cl A ORD 181,543
12,900 Standard Chartered plc ORD 195,109
5,000 Sumitomo Bank, Ltd. (The) ORD 60,198
27,500 Summit Bancorp. 1,125,781
1,000 Toronto-Dominion Bank (The) ORD 52,780
670 UBS AG ORD 193,891
7,700 Wachovia Corp. 679,525
2,200 Wells Fargo & Co. 88,000
1,900 Zions Bancorporation 121,125
------------
10,006,807
------------
BIOTECHNOLOGY--0.3%
3,500 Amgen Inc.(1) 221,484
1,700 Biogen, Inc.(1) 185,406
2,100 Duramed Pharmaceuticals, Inc.(1) 30,844
600 IDEC Pharmaceuticals Corp.(1) 30,244
1,000 MedImmune, Inc.(1) 63,562
2,000 Pharmaceutical Product
Development, Inc.(1) 53,125
2,300 Protein Design Labs, Inc.(1) 44,994
1,200 Ventana Medical Systems, Inc.(1) 23,962
------------
653,621
------------
BROADCASTING & MEDIA--1.0%
7,400 CBS Corp.(1) 308,950
4,400 Clear Channel Communications,
Inc.(1) 290,675
1,500 EchoStar Communications Corp.
Cl A(1) 171,750
6,200 Fox Entertainment Group, Inc.
Cl A(1) 158,100
3,500 Infinity Broadcasting Corp. Cl A(1) 89,469
6,500 Mediaset SpA ORD 52,634
1,400 NTL Inc.(1) 132,212
1,200 RCN Corp.(1) 49,650
4,200 Rogers Communications, Inc.
Cl B ORD(1) 86,618
500 Societe Television
Francaise 1 ORD 119,847
500 Telewest Communications plc
ADR(1) 21,562
32,900 TeleWest Communications plc
ORD(1) 141,326
2,100 United International Holdings,
Inc. Cl A(1) 150,412
1,900 United Pan-Europe
Communications NV ORD(1) 116,330
600 Westwood One, Inc.(1) 20,850
------------
1,910,385
------------
See Notes to Financial Statements
www.americancentury.com 9
Strategic Conservative--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
BUILDING & HOME IMPROVEMENTS--0.1%
700 Centex Construction Products Inc. $ 25,112
1,500 Elcor Corp. 60,562
4,500 York International Corporation 189,844
------------
275,518
------------
BUSINESS SERVICES & SUPPLIES--0.4%
1,500 Acxiom Corp.(1) 40,641
383 Altran Technologies SA ORD 86,654
6,000 Capita Group Plc ORD 59,330
2,500 CSG Systems International, Inc.(1) 81,406
700 MAXIMUS, Inc.(1) 20,825
1,700 Metzler Group, Inc. (The)(1) 55,941
1,000 NCO Group, Inc.(1) 30,656
7 NTT Data Corp. ORD 46,315
1,200 Professional Detailing, Inc.(1) 31,875
1,600 Quanta Services, Inc.(1) 54,300
2,500 Quintiles Transnational Corp.(1) 101,406
2,400 Securitas AB Cl B ORD 34,168
750 Valassis Communications, Inc.(1) 26,109
13,200 WPP Group plc ORD 106,535
------------
776,161
------------
CHEMICALS & RESINS--0.7%
4,300 Air Products and Chemicals, Inc. 176,300
700 Compagnie Francaise d'Etudes et
de Construction Technip ORD 75,869
3,000 Dow Chemical Co. 364,500
1,700 du Pont (E.I.) de Nemours & Co. 111,244
12,300 IMC Global Inc. 257,531
13,400 Lubrizol Corp. 368,500
------------
1,353,944
------------
COMMUNICATIONS EQUIPMENT--1.2%
11,900 Andrew Corp.(1) 184,078
6,500 ANTEC Corp.(1) 190,328
3,000 C-COR Electronics, Inc.(1) 71,531
2,100 CIENA Corp.(1) 60,309
2,200 CommScope, Inc.(1) 57,750
2,300 Comverse Technology, Inc.(1) 155,322
1,600 FORE Systems, Inc.(1) 54,950
2,100 Harmonic Lightwaves, Inc.(1) 103,556
5,000 Harris Corp. 189,062
2,100 JDS Fitel Inc. ORD(1) 142,322
8,400 Lucent Technologies Inc. 477,750
2,300 Motorola, Inc. 190,469
3,500 Newbridge Networks Corp.(1) 96,688
1,900 Nortel Networks Corp. 142,500
1,900 Polycom, Inc.(1) 48,569
1,700 Powerwave Technologies, Inc.(1) 39,206
2,200 QUALCOMM Inc.(1) 213,881
Shares Value
- --------------------------------------------------------------------------------
700 Terayon Communication Systems,
Inc.(1) $ 22,531
------------
2,440,802
------------
COMPUTER PERIPHERALS--0.5%
5,100 Cisco Systems Inc.(1) 555,741
2,800 EMC Corp. (Mass.)(1) 278,950
400 Lexmark International Group,
Inc. Cl A(1) 54,450
3,300 Seagate Technology, Inc.(1) 99,619
------------
988,760
------------
COMPUTER SOFTWARE & SERVICES--2.0%
1,200 Advantage Learning Systems, Inc.(1) 26,550
4,100 America Online Inc. 489,438
1,000 American Management System,
Inc.(1) 31,781
1,700 At Home Corp. Series A(1) 215,422
400 BroadVision, Inc.(1) 20,788
14,900 Cadence Design Systems, Inc.(1) 191,838
998 Cap Gemini SA ORD 143,633
1,200 Compuware Corp.(1) 37,238
1,800 Equant NV New York Shares(1) 149,288
3,500 First Data Corp. 157,281
1,500 Getronics N.V. ORD 57,839
7,300 GTECH Holdings Corp.(1) 180,219
2,100 International Integration Inc.(1) 39,966
300 Intraware, Inc.(1) 6,600
1,200 Keane, Inc.(1) 34,800
5,700 Logica plc ORD 52,849
6,400 Mentor Graphics Corp.(1) 80,600
15,500 Microsoft Corp.(1) 1,251,141
1,400 National Instruments Corp.(1) 53,156
1,700 NCR Corp.(1) 66,406
4,300 Novell, Inc.(1) 100,916
1,900 Proxicom, Inc.(1) 39,544
700 QRS Corp.(1) 51,975
300 Sapient Corp.(1) 19,134
2,400 Sterling Software, Inc.(1) 58,350
10,200 Unisys Corp.(1) 386,962
2,000 USWeb Corp.(1) 50,812
400 Veritas Software Corp.(1) 35,288
------------
4,029,814
------------
COMPUTER SYSTEMS--0.8%
6,500 Apple Computer, Inc.(1) 286,203
11,800 Compaq Computer Corp. 279,512
3,400 Dell Computer Corp.(1) 116,981
11,000 Fujitsu Ltd. ORD 182,858
700 Gateway 2000, Inc.(1) 42,569
3,500 Hewlett-Packard Co. 330,094
3,400 International Business Machines
Corp. 395,462
------------
1,633,679
------------
See Notes to Financial Statements
10 1-800-345-2021
Strategic Conservative--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
CONSTRUCTION & PROPERTY DEVELOPMENT--0.1%
1,400 Centex Corp. $ 51,888
3,400 CRH plc ORD 58,039
1,600 D.R. Horton, Inc. 27,200
400 Dycom Industries, Inc.(1) 19,300
2,800 Insituform Technologies, Inc. Cl A(1) 46,638
1,500 Lafarge Corp. 50,156
1,700 Pulte Corp. 40,481
------------
293,702
------------
CONSUMER PRODUCTS--0.6%
1,100 Avon Products, Inc. 54,381
800 Chattem, Inc.(1) 29,100
700 Clorox Co. (The) 70,656
300 Gillette Company 15,300
1,900 Helen of Troy Ltd.(1) 30,103
9,000 Kao Corporation ORD 245,896
2,200 Procter & Gamble Co. (The) 205,425
12,000 Shiseido Co., Ltd. ORD 176,768
6,800 Whirlpool Corp. 438,600
------------
1,266,229
------------
DIVERSIFIED COMPANIES--1.5%
13,100 BBA Group plc ORD 92,512
3,200 Brambles Industries Limited ORD 85,304
6,600 General Electric Co. (U.S.) 671,138
12,900 Minnesota Mining &
Manufacturing Co. 1,106,175
6,700 Tyco International Ltd. 585,412
1,071 Unilever N.V. New York Shares 69,950
3,927 Vivendi ORD 290,569
------------
2,901,060
------------
ELECTRICAL & ELECTRONIC
COMPONENTS--2.2%
2,100 Advanced Energy Industries, Inc.(1) 52,106
2,600 Aeroflex Inc.(1) 37,862
10,200 Arrow Electronics, Inc.(1) 177,225
1,700 ASM Lithography Holding N.V.
New York Shares(1) 74,906
15,500 Avnet, Inc. 675,219
400 Broadcom Corp. Cl A(1) 38,275
2,200 Conexant Systems, Inc.(1) 85,044
2,300 DII Group, Inc.(1) 75,397
400 Hi/fn, Inc.(1) 23,138
11,900 Intel Corp. 644,831
1,100 KLA-Tencor Corporation(1) 50,084
1,300 Micron Technology, Inc.(1) 49,319
800 Optical Coating Laboratory, Inc. 51,950
1,100 Philips Electronics N.V. New York
Shares(1) 94,600
3,300 Pinnacle Systems, Inc.(1) 169,744
600 PMC-Sierra, Inc.(1) 29,119
Shares Value
- --------------------------------------------------------------------------------
600 Qlogic Corp.(1) $ 65,925
600 Rockwell International Corp. 33,112
1,300 Sanmina Corp.(1) 97,541
1,600 Sawtek Inc.(1) 63,600
1,200 Siemens AG ORD 80,662
2,700 Solectron Corp.(1) 147,825
2,600 Sony Corp. ORD 243,065
2,100 Teradyne, Inc.(1) 110,906
2,500 Texas Instruments Inc. 273,438
4,300 Thomas & Betts Corp. 184,094
4,000 Tokyo Electron Ltd. ORD 219,561
1,900 Uniphase Corp.(1) 255,253
2,100 Unitrode Corp.(1) 43,706
9,600 Vishay Intertechnology, Inc. 199,800
1,100 Xilinx, Inc.(1) 48,847
------------
4,396,154
------------
ENERGY (PRODUCTION & MARKETING)--2.8%
1,500 Anadarko Petroleum Corp. 56,250
10,700 Apache Corp. 385,200
11,400 Atlantic Richfield Co. 954,038
2,679 BP Amoco Plc ADR 286,988
19,900 Burlington Resources Inc. 854,456
3,100 Chevron Corp. 287,331
1,000 Elf Aquitaine SA ORD 144,650
12,400 Exxon Corp. 990,450
2,700 Mobil Corp. 273,375
11,600 Murphy Oil Corp. 569,125
8,500 Royal Dutch Petroleum Co. New
York Shares 480,781
900 Texaco Inc. 58,950
3,800 Union Pacific Resources 52,962
4,600 Unocal Corp. 182,850
------------
5,577,406
------------
ENERGY (SERVICES)--0.3%
15,500 Baker Hughes Inc. 482,438
2,600 Reliant Energy, Inc. 79,300
900 Schlumberger Ltd. 54,169
2,000 Tidewater Inc. 51,125
------------
667,032
------------
ENVIRONMENTAL SERVICES--0.1%
3,682 Waste Management, Inc. 194,686
------------
FINANCIAL SERVICES--1.6%
16,500 Amvescap Plc ORD 150,607
9,722 Banca Intesa S.p.A. ORD 49,443
2,000 Capital One Financial Corp. 301,375
9,500 CIT Group, Inc. (The) Cl A 275,500
800 Credit Suisse Group ORD 138,802
4,200 Fannie Mae 285,600
2,300 Federal Home Loan Mortgage
Corporation 134,119
See Notes to Financial Statements
www.americancentury.com 11
Strategic Conservative--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
1,200 Franklin Resources, Inc. $ 52,200
3,375 ING Groep N.V. ORD 180,259
72 Julius Baer Holding AG ORD 217,789
500 Lehman Brothers Holdings Inc. 27,312
8,400 Lloyds TSB Group plc ORD 110,974
1,300 Merrill Lynch & Co., Inc. 109,200
3,600 Morgan Stanley Dean Witter,
Discover & Co. 347,400
2,612 Provident Financial plc ORD 38,732
2,700 Providian Financial Corp. 259,031
1,600 Schwab (Charles) Corp. 169,300
100 Shohkoh Fund & Co., Ltd. ORD 55,631
12,200 Skandia Forsakrings AB ORD 209,135
------------
3,112,409
------------
FOOD & BEVERAGE--2.1%
1,200 American Italian Pasta Co. Cl A(1) 33,000
72,649 Archer-Daniels-Midland Co. 1,089,735
1,100 Coca-Cola Company (The) 75,144
5,200 Coca-Cola Enterprises, Inc. 188,500
4,400 Diageo plc ORD 46,257
1,500 Earthgrains Company 35,156
400 Groupe Danone ORD 110,051
2,100 Heineken NV ORD 116,648
800 Hormel Foods Corp. 31,700
3,300 IBP, Inc. 70,744
43,200 Interstate Bakeries Corp. 945,000
700 Keebler Foods Co.(1) 23,450
6,000 Kirin Brewery Company, Ltd. ORD 68,584
70 Nestle S.A. ORD 125,806
2,200 PepsiCo, Inc. 78,788
3,300 Quaker Oats Co. (The) 218,006
1,000 Seagram Co. Ltd. (The) 51,938
2,700 Suiza Foods Corp.(1) 98,888
29,500 Tyson Foods, Inc. Cl A 678,500
------------
4,085,895
------------
HEALTHCARE--1.4%
11,600 Aetna Inc. 1,053,425
3,400 Apria Healthcare Group Inc.(1) 70,125
9,600 Beckman Coulter Inc. 487,200
39,000 Columbia/HCA Healthcare Corp. 918,938
4,000 Eisai Company, Ltd. ORD 74,230
2,200 Hooper Holmes, Inc. 39,875
1,000 PacifiCare Health Systems,
Inc. Cl B(1) 86,344
------------
2,730,137
------------
INDUSTRIAL--0.1%
25,400 Invensys plc ORD 115,718
------------
Shares Value
- --------------------------------------------------------------------------------
INDUSTRIAL EQUIPMENT &
MACHINERY--0.3%
2,600 Ingersoll-Rand Co. $ 165,588
3,370 Mannesmann AG ORD 460,078
------------
625,666
------------
INSURANCE--1.6%
183 Allianz AG ORD 49,967
4,400 Allstate Corp. 160,325
1,600 American International Group, Inc. 182,900
1,433 ASR Verzekeringsgroep N.V. ORD 98,639
3,000 Assicurazioni Generali ORD 106,612
1,655 Axa-UAP ORD 190,586
700 Blanch (E.W.) Holdings, Inc. 44,800
11,800 Chubb Corp. (The) 826,738
17,500 CNA Financial Corp.(1) 760,156
3,300 Fidelity National Financial, Inc. 55,894
3,800 First American Financial Corp.
(The) 62,462
2,460 Fortis AG ORD 78,833
1,500 Gallagher (Arthur J.) & Co. 73,031
1,200 LandAmerica Financial Group, Inc. 34,425
3,200 Lincoln National Corp. 325,600
1,400 Loews Corp. 113,838
14,400 Mediolanum SpA ORD 97,995
900 Sampo Insurance Co. plc
Cl A ORD 27,200
------------
3,290,001
------------
LEISURE--0.4%
275 Accor SA ORD 67,406
700 Anchor Gaming(1) 31,391
3,400 Circus Circus Enterprises, Inc.(1) 71,825
5,700 Eastman Kodak Co. 385,462
3,000 Mirage Resorts, Inc.(1) 61,500
2,500 Park Place Entertainment Corp.(1) 26,250
3,400 Viacom, Inc. Cl B(1) 130,900
------------
774,734
------------
MACHINERY & EQUIPMENT--0.7%
170 ABB AG ORD(1) 240,750
2,500 Brooks Automation, Inc.(1) 45,781
1,600 Case Corp. 75,200
15,000 Cooper Industries, Inc. 743,438
1,700 Lam Research Corp.(1) 47,122
3,800 Premark International, Inc. 136,088
1,500 PRI Automation, Inc.(1) 36,750
800 Sidel SA ORD 110,885
------------
1,436,014
------------
See Notes to Financial Statements
12 1-800-345-2021
Strategic Conservative--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
MEDICAL EQUIPMENT & SUPPLIES--0.5%
400 Andrx Corp.(1) $ 40,238
2,600 Boston Scientific Corp.(1) 98,638
600 Closure Medical Corp.(1) 18,619
3,800 CONMED Corp.(1) 129,081
3,200 Guidant Corp. 160,000
1,600 Hillenbrand Industries, Inc. 67,100
1,700 IDEXX Laboratories, Inc.(1) 43,244
1,700 KeraVision, Inc.(1) 16,894
700 Novoste Corp.(1) 17,872
1,400 Ocular Sciences, Inc.(1) 42,831
1,250 Priority Healthcare Corp. Cl B(1) 42,891
2,600 VISX, Inc.(1) 134,956
1,700 Wesley Jessen VisionCare, Inc.(1) 52,753
1,400 Xomed Surgical Products, Inc.(1) 57,312
------------
922,429
------------
METALS & MINING--0.1%
3,300 Alcoa Inc. 181,500
9,100 Broken Hill Proprietary Co.
Ltd. ORD 93,353
------------
274,853
------------
OFFICE EQUIPMENT & SUPPLIES--0.1%
2,500 Electronics for Imaging, Inc.(1) 122,578
------------
PACKAGING & CONTAINERS--0.2%
15,300 Tenneco Inc. 356,681
------------
PAPER & FOREST PRODUCTS--0.5%
6,400 Consolidated Papers, Inc. 177,600
600 Georgia-Pacific Corp. 51,862
3,567 International Paper Co. 178,350
3,900 Rayonier, Inc. 181,838
12,500 Westvaco Corp. 357,031
500 Weyerhaeuser Co. 31,031
700 Willamette Industries, Inc. 29,662
------------
1,007,374
------------
PHARMACEUTICALS--1.5%
2,200 American Home Products Corp. 126,775
2,500 AstraZeneca Group plc ORD 99,324
5,000 Bristol-Myers Squibb Co. 343,125
2,400 ChiRex Inc.(1) 72,375
1,900 Forest Laboratories, Inc.(1) 90,488
2,800 Genentech, Inc.(1) 245,175
2,700 Glaxo Wellcome plc ORD 75,750
1,300 Johnson & Johnson 120,412
1,200 Lilly (Eli) & Co. 85,725
700 Merck & Co., Inc. 47,250
89 Novartis AG ORD 129,128
2,500 Pfizer, Inc. 267,500
3,300 Pharmacia & Upjohn Inc. 182,944
Shares Value
- --------------------------------------------------------------------------------
11,800 Schering-Plough Corp. $ 531,738
4,000 Takeda Chemical Inds. ORD 176,768
1,800 UCB SA ORD 77,455
5,300 Warner-Lambert Co. 328,600
------------
3,000,532
------------
PRINTING & PUBLISHING--0.5%
12,500 Banta Corp. 306,250
5,900 Deluxe Corp. 212,769
8,600 Mondadori (Arnoldo) Editore
SpA ORD 149,225
6,000 Pearson plc ORD 114,336
37,400 Seat Pagine Gialle SpA ORD 50,864
3,000 Toppan Forms Co., Ltd. ORD 56,536
3,100 VNU N.V. ORD 131,488
2,620 Wolters Kluwer NV ORD 105,258
------------
1,126,726
------------
RAILROAD--0.2%
800 Canadian National Railway
Company ORD 51,179
8,000 CSX Corp. 375,500
------------
426,679
------------
REAL ESTATE--0.1%
900 Arden Realty, Inc. 23,006
500 Equity Residential Properties Trust 23,969
900 Hospitality Properties Trust(1) 24,412
1,100 Prologis Trust 22,481
800 Simon Property Group, Inc. 23,400
------------
117,268
------------
RESTAURANTS--0.4%
33,100 CBRL Group, Inc. 572,009
6,000 Foodmaker, Inc.(1) 162,000
900 McDonald's Corp. 34,650
2,300 PJ America, Inc.(1) 53,978
------------
822,637
------------
RETAIL (APPAREL)--0.3%
3,600 AnnTaylor Stores Corp.(1) 155,475
1,400 Chico's FAS, Inc.(1) 31,675
1,000 Children's Place Retail Stores,
Inc. (The)(1) 38,719
2,150 DM Management Co.(1) 34,602
1,300 Gucci Group N.V. New York Shares 85,962
10,000 Hennes & Mauritz AB Cl B ORD 224,301
------------
570,734
------------
RETAIL (FOOD & DRUG)--0.2%
1,800 CVS Corp. 82,800
2,904 Koninklijke Ahold NV ORD 101,233
4,200 Safeway Inc.(1) 195,300
2,100 Universal Corp. 54,862
------------
434,195
------------
See Notes to Financial Statements
www.americancentury.com 13
Strategic Conservative--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
RETAIL (GENERAL MERCHANDISE)--1.2%
1,900 Ames Department Stores, Inc.(1) $ 77,841
660 Carrefour SA ORD 86,528
10,800 Dillard's Inc. Cl A 379,350
1,200 Douglas Holding AG ORD 51,274
1,500 Fred's, Inc. 19,594
500 Lands' End, Inc.(1) 21,375
4,100 May Department Stores Co. (The) 177,581
900 Neiman-Marcus Group, Inc.(1) 24,806
5,700 Next Plc ORD 66,221
9,000 Penney (J.C.) Company, Inc. 465,188
900 Pinault-Printemps-Redoute
SA ORD 153,165
200 Ryohin Keikaku Co. Limited ORD 39,156
1,600 ShopKo Stores, Inc.(1) 56,800
16,900 Wal-Mart Stores, Inc. 720,362
------------
2,339,241
------------
RETAIL (INTERNET)(2)
200 eBay Inc.(1) 35,419
------------
RETAIL (SPECIALTY)--0.6%
1,200 Best Buy Co., Inc.(1) 54,600
1,600 Circuit City Stores-Circuit
City Group 114,900
4,621 Dixons Group plc ORD 82,952
5,400 Home Depot, Inc. 307,125
3,500 Starbucks Corp.(1) 129,172
3,500 Sunglass Hut International, Inc.(1) 53,156
8,300 Toys 'R' Us, Inc.(1) 191,419
2,200 Tractor Supply Co.(1) 65,312
2,000 Yamada Denki ORD 82,788
1,500 Zale Corp.(1) 57,844
------------
1,139,268
------------
RUBBER & PLASTICS(2)
1,100 Tupperware Corp. 24,475
------------
TELEPHONE COMMUNICATIONS--3.3%
300 Aliant Communications, Inc. 14,100
2,700 ALLTEL Corp. 193,556
2,600 Ameritech Corp. 171,112
5,400 AT&T Corp. 299,700
6,400 Bell Atlantic Corp. 350,400
25,300 BellSouth Corp. 1,193,844
15,287 British Telecommunications
plc ORD 254,835
14,600 Cable & Wireless Communications
plc ORD(1) 138,642
21,889 Cable & Wireless Optus
Limited ORD(1) 41,832
9,824 COLT Telecom Group plc ORD(1) 207,343
3,928 Energis plc ORD(1) 94,729
900 Global TeleSystems Group, Inc.(1) 68,316
Shares Value
- --------------------------------------------------------------------------------
15,200 GTE Corp. $ 958,550
700 Intermedia Communications Inc.(1) 17,653
2 Japan Telecom Co. Ltd. ORD 24,359
2,100 MCI WorldCom, Inc.(1) 181,322
17 Nippon Telegraph & Telephone
ORD 165,082
23,000 SBC Communications Inc. 1,175,875
2,147 Sonera Group Oyj ORD 41,953
2,100 Sprint Corp. 236,775
179 Swisscom AG ORD(1) 64,458
800 Tele Danmark A/S ORD 81,591
16,300 Telecom Italia SpA ORD 167,832
5,834 Telefonica S.A. ORD(1) 279,554
1,300 Teleglobe Inc. ORD 39,334
2,300 U S WEST, Inc. 124,344
------------
6,587,091
------------
TEXTILES & APPAREL--0.1%
1,600 Dexter Corp. (The) 62,000
1,700 Polymer Group, Inc.(1) 20,825
750 Quiksilver, Inc.(1) 21,375
1,600 VF Corp. 73,600
------------
177,800
------------
TOBACCO--0.5%
1,300 Fortune Brands, Inc. 53,138
8,000 Imperial Tobacco Group plc ORD 89,932
2,500 Philip Morris Companies Inc. 96,406
22,100 UST Inc. 674,050
------------
913,526
------------
TRANSPORTATION--0.1%
2,100 Atlas Air, Inc.(1) 56,438
1,100 Eagle USA Airfreight, Inc.(1) 51,906
1,800 Forward Air Corp.(1) 49,106
1,500 Hertz Corp. Cl A 82,406
------------
239,856
------------
UTILITIES--1.9%
1,000 AES Corp. (The)(1) 49,750
20,500 AGL Resources Inc. 386,938
14,200 Ameren Corp. 581,312
1,000 Calpine Corp.(1) 54,188
1,700 Energy East Corp. 47,175
13,800 Florida Progress Corp. 578,738
17,600 FPL Group, Inc. 1,024,100
1,400 KN Energy, Inc. 30,012
3,000 LG&E Energy Corp. 68,438
3,400 Minnesota Power & Light Co. 73,100
1,600 Northeast Utilities(1) 28,200
3,400 Sempra Energy 73,100
7,700 Sierra Pacific Resources 280,088
4,300 Southern Co. 122,012
See Notes to Financial Statements
14 1-800-345-2021
Strategic Conservative--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
Shares/Principal Amount Value
- --------------------------------------------------------------------------------
4,900 Texas Utilities Co. $ 220,500
3,100 Utilicorp United Inc. 77,306
------------
3,694,957
------------
WIRELESS COMMUNICATIONS--0.8%
5,600 AirTouch Communications, Inc.(1) 562,800
7,000 Europolitan Holdings AB ORD 60,608
700 Nextel Communications, Inc.(1) 25,791
3,700 Nokia Corp. ADR Cl A 262,700
3 NTT Mobile Communication
Network, Inc. ORD 163,190
4,700 Orange plc ORD(1) 65,028
3,700 Pinnacle Holdings Inc.(1) 66,947
700 Sprint PCS(1) 31,500
13,100 Vodafone Group plc ORD 249,425
1,300 VoiceStream Wireless Corp.(1) 35,100
1,300 Western Wireless Corp. Cl A(1) 31,809
------------
1,554,898
------------
TOTAL COMMON STOCKS 85,504,299
------------
(Cost $71,005,861)
U.S. TREASURY SECURITIES--10.4%
$6,600,000 U.S. Treasury Notes, 5.50%,
3/31/00 6,624,959
6,100,000 U.S. Treasury Notes, 6.625%,
7/31/01 6,245,218
575,000 U.S. Treasury Notes, 5.75%,
8/15/03 576,218
1,000,000 U.S. Treasury Notes, 4.75%,
2/15/04 965,172
1,000,000 U.S. Treasury Notes, 7.875%,
11/15/04 1,097,748
950,000 U.S. Treasury Notes, 6.625%,
5/15/07 998,721
1,000,000 U.S. Treasury Notes, 5.50%,
5/15/09 990,914
1,050,000 U.S. Treasury Bonds, 8.75%,
5/15/17 1,346,930
1,350,000 U.S. Treasury Bonds, 7.875%,
2/15/21 1,630,481
100,000 U.S. Treasury Bonds, 6.125%,
11/15/27 101,145
------------
TOTAL U.S. TREASURY SECURITIES 20,577,506
------------
(Cost $20,762,267)
U.S. GOVERNMENT AGENCY SECURITIES--4.8%
2,200,000 FHLB, 5.05%, 3/1/00 2,195,666
1,350,000 FHLMC, 7.93%, 1/20/05 1,463,515
500,000 FNMA, 5.25%, 1/15/03 488,075
1,500,000 FNMA, 7.69%, 9/13/06 1,556,700
Principal Amount Value
- --------------------------------------------------------------------------------
$2,500,000 FNMA MTN, 6.23%, 7/21/08 $ 2,428,690
1,500,000 SLMA MTN, VRN, 5.22%,
6/1/99, resets weekly off the
3-month T-Bill plus 0.60% with
no caps 1,501,755
------------
TOTAL U.S. GOVERNMENT
AGENCY SECURITIES 9,634,401
------------
(Cost $9,640,303)
SOVEREIGN GOVERNMENTS & AGENCIES--4.2%
AUD 625,000 Australian Government,
9.50%, 8/15/03 466,098
USD 350,000 Province of British Columbia,
5.375%, 10/29/08 323,519
EURO 882,339 Deutschland Republic, 4.75%,
7/4/98 873,093
EURO 2,986,134 Deutschland Republic,
6.00%, 9/15/03 3,445,295
CAD 280,000 Government of Canada,
5.00%, 3/15/00 189,974
CAD 500,000 Government of Canada,
6.00%, 6/1/08 352,590
JPY 140,000,000 Japan Global, 3.30%,
6/20/06 1,320,331
DKK 1,900,000 Kingdom of Denmark,
8.00%, 3/15/06 324,608
GBP 100,000 U.K. Treasury Bonds, 7.50%,
12/7/06 184,395
GBP 400,000 U.K. Treasury Bonds, 9.00%,
8/6/12 885,226
------------
TOTAL SOVEREIGN GOVERNMENTS
& AGENCIES 8,365,129
------------
(Cost $9,009,739)
MORTGAGE-BACKED SECURITIES(3)--9.6%
460,671 FHLMC Pool #E68523, 6.50%,
12/1/12 460,672
37,620 FNMA Pool #343829, 6.50%,
4/1/11 37,547
584,855 FNMA Pool #341477, 6.50%,
5/1/11 583,722
196,440 FNMA Pool #346400, 6.50%,
5/1/11 196,060
343,402 FNMA Pool #346779, 6.50%,
5/1/11 342,737
170,034 FNMA Pool #369034, 6.50%,
2/1/12 169,682
302,563 FNMA Pool #377181, 6.50%,
4/1/12 301,937
610,245 FNMA Pool #378039, 6.50%,
5/1/12 608,983
66,944 FNMA Pool #250576, 7.00%,
6/1/26 67,173
See Notes to Financial Statements
www.americancentury.com 15
Strategic Conservative--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
Principal Amount Value
- --------------------------------------------------------------------------------
$ 507,351 FNMA Pool #373510, 7.50%,
3/1/27 $ 519,000
2,265,330 FNMA Pool #412562, 6.50%,
1/1/28 2,218,852
283,715 GNMA Pool #351417, 7.00%,
1/15/24 285,131
96,849 GNMA Pool #361446, 8.00%,
7/15/24 100,785
121,621 GNMA Pool #377238, 8.50%,
7/20/24 127,911
176,423 GNMA Pool #355903, 8.00%,
9/15/24 183,593
459,681 GNMA Pool #404303, 8.25%,
10/15/24 484,483
30,478 GNMA Pool #392995, 8.75%,
3/15/25 32,413
116,899 GNMA Pool #001991, 9.00%,
4/20/25 123,787
412,229 GNMA Pool #009297, 8.25%,
7/20/25 430,816
428,267 GNMA Pool #412177, 7.00%,
9/15/25 430,155
380,814 GNMA Pool #416856, 7.50%,
10/15/25 390,250
211,079 GNMA Pool #425081, 7.50%,
2/15/26 216,277
22,008 GNMA Pool #417549, 6.00%,
4/15/26 20,969
139,466 GNMA Pool #372335, 7.50%,
4/15/26 142,901
177,191 GNMA Pool #422006, 7.50%,
5/15/26 181,555
141,486 GNMA Pool #402680, 8.00%,
5/15/26 147,177
213,939 GNMA Pool #417068, 8.00%,
5/15/26 222,543
42,976 GNMA Pool #402682, 7.50%,
6/15/26 44,034
705,438 GNMA Pool #431942, 8.25%,
7/15/26 743,611
129,712 GNMA Pool #002273, 9.00%,
8/20/26 137,351
756,965 GNMA Pool #456569, 7.50%,
11/15/27 775,490
1,272,933 GNMA Pool #457351, 7.00%,
12/15/27 1,277,091
543,237 GNMA Pool #404525, 6.50%,
2/15/28 530,802
514,998 GNMA Pool #436196, 6.50%,
2/15/28 503,209
54,059 GNMA Pool #463081, 6.50%,
2/15/28 52,821
399,482 GNMA Pool #256771, 6.50%,
3/15/28 390,338
Principal Amount Value
- --------------------------------------------------------------------------------
$ 395,482 GNMA Pool #461658, 6.50%,
3/15/28 $ 386,429
376,067 GNMA Pool #462615, 6.50%,
3/15/28 367,458
3,438,257 GNMA Pool #466804, 6.50%,
4/15/28 3,359,552
51,014 GNMA Pool #474216, 6.50%,
4/15/28 49,846
505,585 GNMA Pool #433786, 6.00%,
5/15/28 480,058
421,909 GNMA Pool #481773, 6.00%,
7/15/28 400,608
484,371 GNMA Pool #473140, 6.00%,
10/15/28 459,915
------------
TOTAL MORTGAGE-BACKED SECURITIES 18,985,724
------------
(Cost $19,003,844)
ASSET-BACKED SECURITIES(3)--3.3%
600,000 AMRESCO, INC., Series 1998-2,
Class A4 SEQ, 6.45%, 4/25/27 593,889
400,000 Comed Transitional Funding Trust,
Series 1998-1, Class A6 SEQ,
5.63%, 6/25/09 380,262
1,200,000 GMAC Commercial Mortgage
Securities Inc., Series 1999 C1,
Class A2 SEQ, 6.18%, 5/15/33 1,153,806
571,880 Money Store (The) Home Equity
Trust, Series 1995 C, Class A9
SEQ, 6.375%, 9/15/11 573,724
500,000 Money Store (The) Home Equity
Trust, Series 1997 C, Class AF6
SEQ, 6.67%, 2/15/25 503,502
946,482 Morgan Stanley Capital I,
Series 1998 WF1, Class A1
SEQ, 6.25%, 7/15/07 935,753
678,325 Nationslink Funding Corp.,
Series 1998-2, Class A1 SEQ,
6.00%, 11/20/07 663,236
1,000,000 Nationslink Funding Corp.,
Series 1999-1, Class A2 SEQ,
6.32%, 11/20/08 971,515
216,454 Textron Financial Corp. Receivables
Trust, Series 1997 A, Class A,
6.05%, 3/16/09 (Acquired
9/18/97, Cost $216,167)(4) 216,901
600,000 United Companies Financial Corp.,
Home Equity Loan, Series
1997 C, Class A7, 6.85%,
1/15/29 603,291
------------
TOTAL ASSET-BACKED SECURITIES 6,595,879
------------
(Cost $6,749,617)
See Notes to Financial Statements
16 1-800-345-2021
Strategic Conservative--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
Principal Amount Value
- --------------------------------------------------------------------------------
CORPORATE BONDS--17.0%
AEROSPACE & DEFENSE--0.1%
$ 200,000 Lockheed Martin Corp., 6.85%,
5/15/01 $ 202,417
------------
AUTOMOBILES & AUTO PARTS--0.4%
1,000,000 Ford Motor Co., 6.375%, 2/1/29 898,234
------------
BANKING--3.5%
1,500,000 American Express Centurion Bank,
VRN, 4.85%, 6/18/99, resets
monthly off the 1-month LIBOR
minus 0.055% with no caps 1,499,985
550,000 Citigroup Inc., 7.125%, 5/15/06 556,712
500,000 First Bank System Inc., 7.625%,
5/1/05 523,217
350,000 Fleet National Bank, 5.75%,
1/15/09 325,035
2,000,000 KeyBank N.A., VRN, 4.84%,
6/1/99, resets daily off the Fed
Funds rate plus 0.03% with
no caps 2,000,000
1,000,000 NationsBank, N.A., VRN, 5.09%,
6/1/99, resets daily off the Fed
Funds rate plus 0.22% with
no caps 1,000,180
1,000,000 NationsBank, N.A., 6.125%,
7/15/04 991,072
------------
6,896,201
------------
BROADCASTING & MEDIA--0.3%
600,000 British Sky Broadcasting, 6.875%,
2/23/09 573,948
------------
CHEMICALS & RESINS--0.3%
700,000 Monsanto Co., 6.60%, 12/1/28
(Acquired 12/4/98, Cost
$697,480)(4) 644,126
------------
DIVERSIFIED COMPANIES--0.6%
1,300,000 Hutchison Whampoa Financial,
7.50%, 8/1/27 (Acquired
4/27/99-5/26/99, Cost
$1,135,082)(4) 1,133,122
------------
ENERGY (PRODUCTION & MARKETING)--0.9%
500,000 Enron Corp., 6.75%, 7/1/05 493,133
600,000 Enron Corp., 6.625%, 11/15/05 588,450
800,000 USX Corp., 6.65%, 2/1/06 776,116
------------
1,857,699
------------
ENERGY (SERVICES)--0.3%
650,000 Petroleum Geo-Services ASA,
7.125%, 3/30/28 608,990
------------
Principal Amount Value
- --------------------------------------------------------------------------------
FINANCIAL SERVICES--3.7%
$1,000,000 Associates Corp., N.A., 6.25%,
11/1/08 $ 969,560
600,000 Comdisco Inc., 7.75%, 9/1/99 602,906
900,000 Ford Motor Credit Co., 6.55%,
9/10/02 906,442
2,000,000 GMAC, 8.00%, 10/1/99 2,018,575
350,000 Lehman Brothers Holdings Inc.,
6.625%, 4/1/04 344,936
500,000 Toyota Motor Credit Corp., 5.625%,
11/13/03 486,130
2,000,000 USL Capital Corp. MTN, Series D,
6.18%, 11/8/99 2,006,708
------------
7,335,257
------------
FOOD & BEVERAGE--0.8%
800,000 Pepsi Bottling Group Inc., 5.625%,
2/17/09 (Acquired 2/3/99,
Cost $796,536)(4) 746,310
800,000 Pepsi Bottling Group Inc., 7.00%,
3/1/29 (Acquired 3/3/99,
Cost $794,560)(4) 775,606
------------
1,521,916
------------
INSURANCE--0.4%
800,000 Conseco Inc., 6.40%, 6/15/01 785,122
------------
METALS & MINING--0.2%
100,000 Alcan Aluminium Ltd., 5.875%,
4/1/00 100,258
300,000 Barrick Gold Corp., 7.50%,
5/1/07 309,517
------------
409,775
------------
OFFICE EQUIPMENT & SUPPLIES--0.3%
550,000 Xerox Capital Trust, 8.00%,
2/1/27 (Acquired 7/17/97,
Cost $572,132)(4) 563,578
------------
PAPER & FOREST PRODUCTS--0.4%
850,000 Fort James Corp., 6.625%,
9/15/04 853,449
------------
PRINTING & PUBLISHING--0.3%
500,000 News America Holdings Inc.,
9.125%, 10/15/99 505,640
------------
RAILROAD--0.1%
200,000 Norfolk Southern Corp., 7.90%,
5/15/97 211,774
------------
RETAIL (FOOD & DRUG)--0.7%
800,000 Rite Aid Corp., 6.70%, 12/15/01 802,180
750,000 Rite Aid Corp., 6.125%, 12/15/08
(Acquired 1/6/99, Cost
$754,740)(4) 690,681
------------
1,492,861
------------
See Notes to Financial Statements
www.americancentury.com 17
Strategic Conservative--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
Principal Amount Value
- --------------------------------------------------------------------------------
TELEPHONE COMMUNICATIONS--2.3%
$1,500,000 Cable & Wireless Communications
plc, 6.625%, 3/6/05 $ 1,476,278
400,000 Cincinnati Bell Inc., 6.30%,
12/1/28 363,874
800,000 GTE North Inc., Series H, 5.65%,
11/15/08 747,157
600,000 MCI WorldCom, Inc., 7.55%,
4/1/04 621,907
500,000 MCI WorldCom, Inc., 6.40%,
8/15/05 490,694
300,000 Sprint Capital Corp., 6.875%,
11/15/28 282,225
500,000 U S West Capital Funding Inc.,
6.125%, 7/15/02 496,960
------------
4,479,095
------------
UTILITIES--0.9%
300,000 Citizens Utilities Co., 7.60%,
6/1/06 311,664
700,000 Georgia Power Co., 5.50%,
12/1/05 662,679
600,000 Southern Investments UK, 6.80%,
12/1/06 594,119
250,000 Virginia Electric & Power, 8.00%,
3/1/04 265,898
------------
1,834,360
------------
WIRELESS COMMUNICATIONS--0.5%
800,000 TCI Communications, Inc., 8.75%,
8/1/15 944,437
------------
TOTAL CORPORATE BONDS 33,752,001
------------
(Cost $34,409,954)
COMMERCIAL PAPER(5)--5.8%
BANKING--1.2%
2,315,000 Banque National de Paris, 4.82%,
6/15/99 2,309,377
------------
ENERGY (PRODUCTION & MARKETING)--0.7%
1,500,000 Motiva Enterprises LLC, 4.90%,
8/26/99 (Acquired 5/28/99,
Cost $1,481,625)(4) 1,481,484
------------
FINANCIAL SERVICES--2.1%
1,500,000 Quincy Capital Corp., 4.82%,
7/6/99 (Acquired 5/7/99,
Cost $1,487,950)(4) 1,492,096
1,210,000 Receivables Capital Corp., 4.81%,
6/16/99 (Acquired 5/7/99,
Cost $1,203,533)(4) 1,206,898
1,500,000 Windmill Funding Corp., 4.82%,
7/14/99 (Acquired 5/13/99,
Cost $1,487,548)(4) 1,490,450
------------
4,189,444
------------
Principal Amount Value
- --------------------------------------------------------------------------------
FOOD & BEVERAGE--0.5%
$1,000,000 Hershey Foods Corp., 4.85%,
9/3/99 (Acquired 5/28/99,
Cost $986,797)(4) $ 986,542
------------
INDUSTRIAL--0.5%
1,000,000 Siebe plc, 4.82%, 8/11/99
(Acquired 5/13/99, Cost
$987,950)(4) 989,754
------------
INSURANCE--0.8%
1,500,000 Transamerica Occidental Life
Insurance Co., 4.82%, 7/19/99
(Acquired 5/13/99, Cost
$1,486,544)(4) 1,489,416
------------
TOTAL COMMERCIAL PAPER 11,446,017
------------
(Cost $11,453,202)
TEMPORARY CASH INVESTMENTS--1.9%
Repurchase Agreement, Merrill Lynch & Co., Inc.,
(U.S. Treasury obligations), in a joint trading
account at 4.75%, dated 5/28/99, due
6/1/99 (Delivery value $3,802,006) 3,800,000
------------
(Cost $3,800,000)
TOTAL INVESTMENT SECURITIES--100.0% $198,660,956
============
(Cost $185,834,787)
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Contracts Settlement Unrealized
to Sell Date Value Gain/(Loss)
- ------------------------------------------------------------------
86,435 CHF 6/30/99 $ 56,765 $ 340
2,002,477 EURO 6/30/99 2,090,712 14,287
282,924 GBP 6/30/99 452,919 (955)
78,782,200 JPY 6/30/99 650,770 (618)
230,125 SEK 6/30/99 26,783 144
--------------- ---------------
$3,277,949 $13,198
=============== ===============
(Value on Settlement Date $3,291,147)
Forward foreign currency exchange contracts are used by the portfolio management
team in an effort to protect foreign investments against declines in foreign
currencies. This is also known as hedging. The contracts are called "forward"
because they allow your fund to exchange a foreign currency for U.S. dollars at
a date in the future--and at a price (known as the exchange rate) agreed upon
when the contract is initially entered into.
See Notes to Financial Statements
18 1-800-345-2021
Strategic Conservative--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
NOTES TO SCHEDULE OF INVESTMENTS
ADR = American Depositary Receipt
AUD = Australian Dollar
CAD = Canadian Dollar
CHF = Swiss Franc
DKK = Danish Krone
FHLB = Federal Home Loan Bank
FHLMC = Federal Home Loan Mortgage Corporation
FNMA = Federal National Mortgage Association
GBP = British Pound
GNMA = Government National Mortgage Association
JPY = Japanese Yen
LIBOR = London Interbank Offered Rate
MTN = Medium Term Note
ORD = Foreign Ordinary Share
SEK = Swedish Krona
SLMA = Student Loan Marketing Association
VRN = Variable Rate Note. Interest reset date is indicated and used in
calculating the weighted average portfolio maturity. Rate shown is effective May
31, 1999.
resets = The frequency with which a security's coupon changes, based on current
market conditions or an underlying index. The more frequently a security resets,
the less risk the investor is taking that the coupon will vary significantly
from current market rates.
(1) Non-income producing.
(2) Industry is less than 0.05% of total investment securities.
(3) Final maturity indicated. Expected remaining maturity used for purposes of
calculating the weighted average portfolio maturity.
(4) Security was purchased under Rule 144A or Section 4(2) of the Securities
Act of 1933 or is a private placement and, unless registered under the Act
or exempted from registration, may only be sold to qualified institutional
investors. The aggregate value of restricted securities at May 31, 1999,
was $13,906,964, which represented 7.0% of net assets.
(5) The rates for commercial paper are the yield to maturity at purchase.
- --------------------------------------------------------------------------------
UNDERSTANDING THE SCHEDULE OF INVESTMENTS--This schedule tells you which
investments your fund owned on the last day of the reporting period.
The schedule includes:
* a list of each investment
* the share amount (stocks) or principal amount (bonds) of each investment
* the market value of each investment
* the percentage of investments in each industry, as applicable
* the percent and dollar breakdown of each investment category
See Notes to Financial Statements
www.americancentury.com 19
Strategic Moderate--Performance
- --------------------------------------------------------------------------------
TOTAL RETURNS AS OF MAY 31, 1999
<TABLE>
INVESTOR CLASS (INCEPTION 2/15/96) ADVISOR CLASS (INCEPTION 10/2/96)
LEHMAN THREE-MONTH LEHMAN THREE-MONTH
STRATEGIC AGGREGATE U.S. STRATEGIC AGGREGATE U.S.
MODERATE S&P 500 BOND INDEX TREASURY BILL MODERATE S&P 500 BOND INDEX TREASURY BILL
================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6 MONTHS(1) 6.14% 12.59% -0.76% 2.22% 5.81% 12.59% -0.76% 2.22%
1 YEAR 5.76% 21.04% 4.35% 4.62% 5.46% 21.04% 4.35% 4.62%
================================================================================================================
AVERAGE ANNUAL RETURNS
3 YEARS 12.19% 27.07% 7.83% 4.98% -- -- -- --
LIFE OF FUND 12.10% 25.66% 6.72%(2) 4.99%(2) 12.23% 28.70% 7.56%(3) 4.95%(3)
</TABLE>
(1) Returns for periods less than one year are not annualized.
(2) Since 2/29/96, the date nearest the class's inception for which data are
available.
(3) Since 9/30/96, the date nearest the class's inception for which data are
available.
See pages 69-71 for more information about share classes, returns, and the
comparative indices.
[mountain graph - data below]
GROWTH OF $10,000 OVER LIFE OF FUND
Value on 5/31/99
S&P 500 $21,512
Strategic Moderate $14,662
Lehman Aggregate $12,352
Three-Month T-Bill $11,713
S&P 500 Strategic Lehman Three-Month
Index Moderate Aggregate T-Bill
2/29/96 $10,000 $10,000 $10,000 $10,000
3/31/96 $10,096 $10,071 $9,930 $10,041
4/30/96 $10,244 $10,314 $9,874 $10,082
5/31/96 $10,508 $10,394 $9,855 $10,125
6/30/96 $10,548 $10,411 $9,987 $10,167
7/31/96 $10,081 $10,085 $10,014 $10,211
8/31/96 $10,294 $10,309 $9,997 $10,254
9/30/96 $10,873 $10,650 $10,171 $10,297
10/31/96 $11,173 $10,773 $10,396 $10,339
11/30/96 $12,016 $11,080 $10,574 $10,382
12/31/96 $11,778 $11,019 $10,476 $10,425
1/31/97 $12,513 $11,204 $10,508 $10,469
2/28/97 $12,612 $11,121 $10,535 $10,513
3/31/97 $12,095 $10,824 $10,418 $10,558
4/30/97 $12,816 $10,989 $10,574 $10,603
5/31/97 $13,599 $11,529 $10,674 $10,648
6/30/97 $14,204 $11,851 $10,801 $10,691
7/31/97 $15,333 $12,414 $11,093 $10,736
8/31/97 $14,475 $12,143 $10,999 $10,783
9/30/97 $15,267 $12,711 $11,160 $10,827
10/31/97 $14,757 $12,397 $11,322 $10,871
11/30/97 $15,440 $12,523 $11,374 $10,919
12/31/97 $15,705 $12,699 $11,489 $10,966
1/31/98 $15,878 $12,742 $11,636 $11,012
2/28/98 $17,023 $13,353 $11,627 $11,058
3/31/98 $17,895 $13,819 $11,666 $11,105
4/30/98 $18,077 $13,928 $11,727 $11,150
5/31/98 $17,766 $13,862 $11,839 $11,197
6/30/98 $18,487 $14,084 $11,939 $11,243
7/31/98 $18,291 $13,974 $11,964 $11,289
8/31/98 $15,648 $12,717 $12,159 $11,335
9/30/98 $16,651 $13,015 $12,444 $11,378
10/31/98 $18,004 $13,393 $12,378 $11,416
11/30/98 $19,095 $13,815 $12,448 $11,458
12/31/98 $20,194 $14,318 $12,486 $11,501
1/31/99 $21,039 $14,457 $12,574 $11,542
2/28/99 $20,384 $13,972 $12,354 $11,585
3/31/99 $21,200 $14,315 $12,422 $11,628
4/30/99 $22,020 $14,826 $12,462 $11,669
5/31/99 $21,512 $14,662 $12,352 $11,713
10,000 investment made 2/29/96
The graph at left shows the growth of a $10,000 investment over the life of the
fund, while the graph below shows the fund's year-by-year performance. The S&P
500, Lehman Aggregate Bond, and Three-Month U.S. Treasury Bill (T-Bill) indices
are provided for comparison in each graph. Strategic Moderate's total returns
include operating expenses (such as transaction costs and management fees) that
reduce returns, while the total returns of the indices do not. The graphs are
based on Investor Class shares only; performance for other classes will vary due
to differences in fee structures (see the Total Returns table above). Past
performance does not guarantee future results. Investment return and principal
value will fluctuate, and redemption value may be more or less than original
cost.
[bar graph - data below]
ONE-YEAR RETURNS OVER LIFE OF FUND (PERIODS ENDING MAY 31)
Strategic Lehman Three-Month
Moderate S&P 500 Aggregate T-Bill
DATE RETURN RETURN RETURN RETURN
5/96* 3.94% 5.04% -1.45% 1.25%
5/97 10.92% 29.48% 8.32% 5.17%
5/98 20.24% 30.68% 10.91% 5.16%
5/99 5.76% 21.04% 4.35% 4.62%
* From 2/29/96 (the date nearest the class's inception for which index data are
available) to 5/31/96.
20 1-800-345-2021
Strategic Moderate--Q&A
- --------------------------------------------------------------------------------
An interview with Jeff Tyler and Brian Howell, portfolio managers on the
Strategic Asset Allocation funds management team.
HOW DID STRATEGIC MODERATE PERFORM DURING THE SIX MONTHS ENDED MAY 31, 1999?
Strategic Moderate returned 6.14% for the six-month period (see the
previous page for additional performance information).* That return reflects
Strategic Moderate's diversified investment approach. The portfolio's stock
holdings helped the fund produce positive returns despite relatively poor
performance by bonds (see pages 3 and 4 for a detailed discussion of world stock
and bond markets for the last six months).
HOW IS STRATEGIC MODERATE MANAGED?
We manage Strategic Moderate to give shareholders long-term capital growth
while trying to limit share price volatility and moderate losses in a down
market. To do that, we generally allocate 60% of the fund's investments to
stocks, 30% to bonds, and 10% to money market securities.
These weightings represent the portfolio's neutral position. We make modest
adjustments around these percentages to try and enhance performance.
HOW DID YOU POSITION THE FUND RELATIVE TO ITS NEUTRAL ASSET MIX OVER THE LAST
SIX MONTHS?
We ran the portfolio close to neutral, with only a very modest overweight
in stocks. Within equities, we added more mid-sized and value shares in the last
six months, putting less emphasis on bigger, higher-priced growth stocks.
CAN YOU ELABORATE ON YOUR DECISION TO OVERWEIGHT VALUE STOCKS?
Sure, but first let's take a step back. The last few years, investors
focused on a handful of very large, fast-growing companies--typically
traditional technology stocks, but also including some Internet shares. In
effect, these stocks became highly leveraged plays on the U.S. economy--the
better the economy, the faster the earnings for these companies were expected to
grow, and the higher their stock price.
But rising interest rates over the last several months threatened those
lofty growth assumptions, calling into question the extremely high valuations
awarded many large-company growth stocks. As a result, we felt value shares had
a better risk/return outlook than the largest growth stocks.
DID THE PORTFOLIO BENEFIT FROM ITS EMPHASIS ON VALUE STOCKS?
Yes, though we might have been a little early on that trade--many of these
stocks generally underperformed large-cap growth shares until April and May.
That's when interest rates shot higher, plus Compaq Computer, a leading
high-tech firm, said profits would be much lower than expected. Many investors
took money out of high-priced growth stocks and put it to work in undervalued
sectors of the market. In general, that money went from growth to value and down
the capitalization ladder from large- to mid-cap stocks. As a result, value
outperformed growth and mid- beat large-cap for the six months (see page 3).
* All fund returns referenced in this interview are for Investor Class shares.
[right margin]
"WE FELT VALUE SHARES HAD A BETTER RISK/RETURN OUTLOOK THAN THE LARGEST GROWTH
STOCKS."
[pie chart - data below]
ASSET ALLOCATION
(AS OF MAY 31, 1999)
PERCENT OF FUND INVESTMENTS
U.S. Stocks 47%
U.S. Bonds 25%
Foreign Stocks 14%
Foreign Bonds 5%
Money Market
Securities 9%
See page 70 for the fund's neutral asset mix.
Investment terms are defined in the Glossary on pages 71-72.
www.americancentury.com 21
Strategic Moderate--Q&A
- --------------------------------------------------------------------------------
(Continued)
WHAT CHANGES DID YOU MAKE TO THE BOND PORTION OF THE PORTFOLIO?
We made only very modest adjustments, adding some higher-yielding corporate
bonds. One way to measure the relative attractiveness of corporate bonds is to
look at the spread, or difference in yield, between corporates and Treasurys.
The wider the yield spread, the more attractive corporate bonds become. In late
1998, the spread between corporates and Treasurys reached its widest level since
the recession of 1990. With the economy and corporate profits generally healthy,
we simply felt these values were too good to pass up.
DID YOU EMPHASIZE A PARTICULAR SECTOR OF THE CORPORATE BOND MARKET?
In general, we liked bonds issued by cyclical companies. Cyclical companies
are closely tied to the health of the economy, so their bonds tend to perform
best when the economy is strong. When fears of recession crippled the market in
the third quarter of 1998, these bonds were severely punished and experienced
sharp price declines. We used that opportunity to buy some of these securities
at attractive prices. As economic growth improved and investors once again
became interested in these bonds, cyclicals performed relatively well.
WHAT'S YOUR OUTLOOK FOR THE GLOBAL ECONOMY?
We have a generally positive outlook. Analysts expect global growth to come
in at 2.5-3.0% this year, compared with only about 1.5% in 1998. Also in
contrast to 1998, many think the U.S. will lag the rest of the world in 1999.
Better economic growth would lead you to expect higher stock prices. Because
world economies are so closely linked, more business overseas should also
benefit companies here at home.
ARE THERE ANY POTENTIAL RISKS TO THIS OUTLOOK?
Two issues we're watching carefully are inflation and the potential year
2000 (Y2K) computer problem. While it's impossible to predict the economic
impact of the Y2K problem, we are taking steps to measure the Y2K-readiness of
the issuers of the fund's portfolio securities. We'll also be keeping a close
eye on the financial markets as we get closer to year-end.
[left margin]
FUND'S U.S. STOCKS (AS OF MAY 31, 1999)
NUMBER OF COMPANIES 357
DIVIDEND YIELD 1.38%
PRICE/EARNINGS RATIO 23.7
% OF FUND'S % OF
U.S. STOCKS FUND
TOP 5 U.S. STOCKS
MICROSOFT CORP. 2.4% 1.1%
BELLSOUTH CORP. 1.6% 0.7%
SBC COMMUNICATIONS INC. 1.4% 0.6%
WAL-MART STORES, INC. 1.4% 0.6%
CHASE MANHATTAN CORP. 1.4% 0.6%
FUND'S FOREIGN STOCKS (AS OF MAY 31, 1999)
NUMBER OF COMPANIES 283
DIVIDEND YIELD 1.19%
% OF FUND'S % OF
COUNTRY FOREIGN STOCKS FUND
TOP 5 FOREIGN STOCKS
MANNESMANN AG GERMANY 2.3% 0.3%
VIVENDI FRANCE 1.5% 0.2%
TELEFONICA S.A. SPAIN 1.3% 0.2%
BRITISH TELECOM-
MUNICATIONS PLC U.K. 1.3% 0.2%
VODAFONE GROUP PLC U.K. 1.2% 0.2%
[pie chart - data below]
PERCENT OF FUND'S FOREIGN STOCKS
Europe 69%
Asia/Pacific 22%
Americas
(excluding U.S.) 9%
22 1-800-345-2021
Strategic Moderate--Q&A
- --------------------------------------------------------------------------------
(Continued)
AND WHAT ABOUT THE RISK OF INFLATION?
A big reason the inflation rate fell to its lowest level in a dozen years
in 1998 was the weakness of the global economy. With growth rebounding this
year, inflation has begun to pick up, though it remains modest by historical
standards.
That brings us to the other reason inflation has declined throughout the
1990s--increased worker productivity. More productive workers explain why both
wages and corporate profits rose while inflation fell. However, it's uncertain
if productivity gains can continue at the same pace they have in the past.
Federal Reserve Chairman Alan Greenspan said as much when announcing his
intention to raise short-term interest rates to head off more serious inflation
down the road. But it seems that a vigilant Fed and the ability of the global
economy to produce more goods than there's currently demand for will keep
inflation from getting out of hand anytime soon.
WHAT'S YOUR OUTLOOK FOR INTEREST RATES?
We've already seen a big increase in interest rates since the beginning of
the year, so we don't expect rates to go much higher. Instead, we think it's
more likely bond yields will trade in a relatively narrow range. Of course, that
assumes inflation doesn't increase dramatically and that the world economy
gradually improves.
GIVEN THIS OUTLOOK, HOW WILL YOU POSITION STRATEGIC MODERATE'S STOCK PORTFOLIO?
If we're right and we get good growth and modest inflation, stocks could do
well. Value shares continue to look like good buys, so our biggest bet in U.S.
equities is likely to be in that area. And with economic growth overseas
expected to be even stronger than here at home, foreign stocks look very
attractive. As a result, we may overweight foreign stocks relative to foreign
bonds going forward.
AND HOW DO YOU EXPECT TO POSITION THE FUND'S BONDS?
Strong growth and relatively stable rates make a very appealing environment
for corporate bonds. However, the outlook is somewhat clouded by Y2K. We think
the prudent thing to do is keep an eye on this situation and do our best to
position the portfolio to respond to the investment challenges and opportunities
Y2K might present.
[right margin]
"ANALYSTS EXPECT GLOBAL GROWTH TO COME IN AT 2.5-3.0% THIS YEAR, COMPARED WITH
ONLY ABOUT 1.5% IN 1998. BETTER ECONOMIC GROWTH WOULD LEAD YOU TO EXPECT HIGHER
STOCK PRICES."
FUND'S U.S. BONDS (AS OF MAY 31, 1999)
NUMBER OF SECURITIES 139
WEIGHTED AVERAGE MATURITY 8.3 YEARS
AVERAGE DURATION 4.7 YEARS
[pie chart - data below]
PERCENT OF FUND'S U.S. BONDS
Corporate 44%
Mortgage-Backed 17%
U.S. Treasury 21%
Asset-Backed 7%
U.S. Govt. Agency 11%
FUND'S FOREIGN BONDS (AS OF MAY 31, 1999)
NUMBER OF SECURITIES 9
WEIGHTED AVERAGE MATURITY 8.9 YEARS
AVERAGE DURATION 6.1 YEARS
[pie chart - data below]
PERCENT OF FUND'S FOREIGN BONDS
Europe 72%
Asia/Pacific 22%
Americas
(excluding U.S.) 6%
www.americancentury.com 23
Strategic Moderate--Schedule of Investments
- --------------------------------------------------------------------------------
MAY 31, 1999 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS & RIGHTS--60.3%
AEROSPACE & DEFENSE--1.5%
1,200 Alliant Techsystems Inc.(1) $ 102,000
2,900 Aviation Sales Co.(1) 111,650
1,900 Avondale Industries, Inc.(1) 69,350
16,300 Boeing Co. 688,675
10,700 Bombardier Inc. Cl B ORD 166,229
4,300 Cobham PLC ORD 63,694
6,300 Cordant Technologies Inc. 305,550
3,600 EG&G, Inc. 106,875
3,500 General Dynamics Corp. 230,125
13,100 Goodrich (B.F.) Company (The) 530,550
16,100 Lockheed Martin Corp. 651,044
1,700 Newport News Shipbuilding Inc. 46,750
8,200 Raytheon Co. Cl B 558,112
14,700 United Technologies Corp. 912,319
------------
4,542,923
------------
AIRLINES(2)
1,100 AMR Corp.(1) 71,569
600 Delta Air Lines Inc. 34,425
------------
105,994
------------
AUTOMOBILES & AUTO PARTS--1.1%
4,400 Coachmen Industries, Inc. 96,800
15,800 Cooper Tire and Rubber Company 375,250
2,236 DaimlerChrysler AG ORD 192,828
1,817 Delphi Automotive Systems Corp.(1) 35,659
20,500 Ford Motor Co. 1,169,781
41,000 Fuji Heavy Industries Ltd. ORD 266,551
2,600 General Motors Corp. 179,400
2,000 Johnson Controls, Inc. 126,125
3,800 National R.V. Holdings, Inc.(1) 97,612
50 Porsche AG ORD 113,855
32,700 Superior Industries International, Inc. 815,456
------------
3,469,317
------------
BANKING--6.1%
56,739 Anglo Irish Bank Corp. plc ORD 155,823
9,300 Argentaria SA ORD 208,281
15,700 Australia & New Zealand Banking
Group Ltd. ORD 113,883
13,700 Banc One Corp. 774,906
7,066 Banca Popolare Commercio e
Industria ORD 160,900
4,382 Banca Popolare di Brescia ORD 172,850
2,600 Banca Popolare di Lodi ORD 28,315
7,495 Banco Mello, S.A. ORD 69,127
14,109 Bank of Ireland ORD 261,293
45 Bank Sarasin & Cie Cl B ORD 76,014
29,300 BankAmerica Corp. 1,895,344
7,500 Barclays PLC ORD 227,352
Shares Value
- --------------------------------------------------------------------------------
27,700 Chase Manhattan Corp. $ 2,008,250
10,100 Citigroup Inc. 669,125
24,500 Dao Heng Bank Group Ltd. ORD 95,097
4,000 Deutsche Pfandbrief-und
Hypothekenbank AG ORD 345,994
20,450 Equitable Banking Corp. ORD 51,327
4,900 Fifth Third Bancorp 334,272
22,900 First Union Corp. 1,054,831
37,900 First Virginia Banks, Inc. 1,883,156
4,100 Housing & Commercial Bank,
Korea ORD(1) 112,367
2,400 HSBC Holdings plc ORD 78,610
62,200 Keppel Bank ORD 136,299
30,500 KeyCorp 1,059,875
5,000 Kookmin Bank ORD 75,684
19,100 Mellon Bank Corp. 681,631
941 National Bank of Greece S.A.
ORD 65,626
8,900 National Westminster Bank PLC
ORD 204,089
3,800 Northern Trust Corp. 343,900
1,800 Piraeus Bank S.A. ORD 52,810
9,100 PNC Bank Corp. 520,975
17,800 Regions Financial Corp. 674,731
4,100 Shinhan Bank GDR(1) 78,002
2,000 Societe Generale Cl A ORD 363,085
26,000 Standard Chartered plc ORD 393,244
11,000 Sumitomo Bank, Ltd. (The) ORD 132,436
38,800 Summit Bancorp. 1,588,375
2,000 Toronto-Dominion Bank (The)
ORD 105,560
1,300 UBS AG ORD 376,207
3,600 Unibanco-Uniao de Bancos
Brasileiros S.A. GDR(1) 81,225
567 Van der Moolen Holding N.V. ORD 36,872
10,800 Wachovia Corp. 953,100
5,600 Wells Fargo & Co. 224,000
10,000 Wing Hang Bank Ltd. ORD 28,241
5,300 Zions Bancorporation 337,875
------------
19,290,959
------------
BIOTECHNOLOGY--0.6%
9,600 Amgen Inc.(1) 607,500
4,500 Biogen, Inc.(1) 490,781
5,700 Duramed Pharmaceuticals, Inc.(1) 83,719
1,500 IDEC Pharmaceuticals Corp.(1) 75,609
2,700 MedImmune, Inc.(1) 171,619
4,800 Pharmaceutical Product
Development, Inc.(1) 127,500
6,100 Protein Design Labs, Inc.(1) 119,331
1,100 QIAGEN N.V.(1) 77,619
3,100 Ventana Medical Systems, Inc.(1) 61,903
------------
1,815,581
------------
See Notes to Financial Statements
24 1-800-345-2021
Strategic Moderate--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
BROADCASTING & MEDIA--1.9%
9,600 BEC World Public Co., Limited
ORD $ 51,724
2,900 Capital Radio plc ORD 40,727
21,400 CBS Corp.(1) 893,450
11,600 Clear Channel Communications,
Inc.(1) 766,325
1,300 Cogeco Cable, Inc. ORD 26,722
4,000 EchoStar Communications
Corp. Cl A(1) 458,000
15,600 Fox Entertainment Group,
Inc. Cl A(1) 397,800
6,700 Grupo Televisa S.A. GDR(1) 280,144
1,264 Havas Advertising SA ORD 246,990
10,000 Infinity Broadcasting Corp. Cl A(1) 255,625
13,100 Mediaset SpA ORD 106,077
4,400 Modern Times Group
MTG AB Cl B ORD(1) 96,647
200 NRJ SA ORD 42,728
3,800 NTL Inc.(1) 358,862
1,600 PrimaCom AG ORD(1) 65,030
3,100 RCN Corp.(1) 128,262
8,300 Rogers Communications,
Inc. Cl B ORD(1) 171,175
1,000 Societe Television
Francaise 1 ORD 239,694
1,700 Telewest Communications
plc ADR(1) 73,312
66,000 TeleWest Communications
plc ORD(1) 283,511
9,200 United International Holdings,
Inc. Cl A(1) 658,950
3,700 United Pan-Europe
Communications NV ORD(1) 226,537
1,400 Westwood One, Inc.(1) 48,650
------------
5,916,942
------------
BUILDING & HOME IMPROVEMENTS--0.2%
2,600 Centex Construction Products Inc. 93,275
3,400 Elcor Corp. 137,275
6,000 York International Corporation 253,125
------------
483,675
------------
BUSINESS SERVICES & SUPPLIES--1.0%
4,100 Acxiom Corp.(1) 111,084
1,065 Altran Technologies SA ORD 240,957
5,200 Athlon Groep N.V. ORD 132,228
12,500 Capita Group Plc ORD 123,604
14,400 CGI Group, Inc. ORD(1) 313,097
6,800 CSG Systems International, Inc.(1) 221,425
1,000 DIS Deutscher Industrie
Service AG ORD 50,023
5,780 Korea Telecom Corporation ORD 329,536
1,700 MAXIMUS, Inc.(1) 50,575
Shares Value
- --------------------------------------------------------------------------------
5,000 Metzler Group, Inc. (The)(1) $ 164,531
3,000 NCO Group, Inc.(1) 91,969
13 NTT Data Corp. ORD 86,014
5,837 Parity plc ORD 56,503
3,400 Professional Detailing, Inc.(1) 90,312
200 PubliGroupe S.A. ORD 121,780
4,600 Quanta Services, Inc.(1) 156,112
6,800 Quintiles Transnational Corp.(1) 275,825
4,800 Securitas AB Cl B ORD 68,336
161,000 Singapore Technologies
Engineering Ltd. ORD 175,467
700 Sixt AG ORD 51,430
1,000 Toyo Information Systems Co., Ltd.
ORD 27,075
2,100 Triad Group PLC ORD 14,460
2,748 Unique International NV ORD 62,718
700 VA Technologie AG ORD 58,725
1,800 Valassis Communications, Inc.(1) 62,662
26,500 WPP Group plc ORD 213,876
------------
3,350,324
------------
CHEMICALS & RESINS--0.7%
6,000 Air Products and Chemicals, Inc. 246,000
1,500 Compagnie Francaise d'Etudes et
de Construction Technip ORD 162,575
6,000 Dow Chemical Co. 729,000
4,800 du Pont (E.I.) de Nemours & Co. 314,100
17,200 IMC Global Inc. 360,125
18,700 Lubrizol Corp. 514,250
------------
2,326,050
------------
COMMUNICATIONS EQUIPMENT--1.8%
16,700 Andrew Corp.(1) 258,328
17,200 ANTEC Corp.(1) 503,638
7,400 C-COR Electronics, Inc.(1) 176,444
5,600 CIENA Corp.(1) 160,825
5,500 CommScope, Inc.(1) 144,375
5,650 Comverse Technology, Inc.(1) 381,552
4,000 FORE Systems, Inc.(1) 137,375
1,400 Gilat Satellite Networks Ltd.(1) 74,025
5,400 Harmonic Lightwaves, Inc.(1) 266,288
6,700 Harris Corp. 253,344
756 International Contract
Manufacturing Limited ORD(1) 661
4,300 JDS Fitel Inc. ORD(1) 291,422
24,500 Lucent Technologies Inc. 1,393,438
3,200 Motorola, Inc. 265,000
9,600 Newbridge Networks Corp.(1) 265,200
4,000 Nortel Networks Corp. 300,000
4,600 Polycom, Inc.(1) 117,588
3,900 Powerwave Technologies, Inc.(1) 89,944
5,700 QUALCOMM Inc.(1) 554,147
See Notes to Financial Statements
www.americancentury.com 25
Strategic Moderate--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
4,900 Tandberg ASA ORD(1) $ 65,695
2,000 Terayon Communication
Systems, Inc.(1) 64,375
------------
5,763,664
------------
COMPUTER PERIPHERALS--0.9%
14,100 Cisco Systems Inc.(1) 1,536,459
6,500 EMC Corp. (Mass.)(1) 647,562
1,100 Lexmark International Group,
Inc. Cl A(1) 149,738
7,700 Psion plc ORD 96,177
9,000 Seagate Technology, Inc.(1) 271,688
------------
2,701,624
------------
COMPUTER SOFTWARE & SERVICES--3.8%
3,400 Advantage Learning Systems, Inc.(1) 75,225
6,400 Amdocs Ltd.(1) 146,800
11,500 America Online Inc. 1,372,812
2,800 American Management
System, Inc.(1) 88,988
4,800 At Home Corp. Series A(1) 608,250
2,100 Baltimore Technologies plc ORD(1) 29,173
1,300 BroadVision, Inc.(1) 67,559
20,800 Cadence Design Systems, Inc.(1) 267,800
2,026 Cap Gemini SA ORD 291,584
4,500 Computershare Limited ORD(1) 41,106
3,300 Compuware Corp.(1) 102,403
1,606 Delta Informatics S.A. ORD 74,669
1,700 Eidos plc ORD(1) 56,624
3,900 Equant NV New York Shares(1) 323,456
500 Excalibur Technologies Corp.(1) 7,062
7,262 Fibernet Group plc ORD(1) 54,249
9,900 First Data Corp. 444,881
1,600 FortuneCity.com, Inc. ORD(1) 29,514
2,000 Fundtech Ltd.(1) 64,625
3,100 Getronics N.V. ORD 119,535
597 GFI Informatique(1) 72,793
10,200 GTECH Holdings Corp.(1) 251,812
3,100 IBS AB ORD(1) 60,526
2,810 Icon Medialab International
AB ORD(1) 104,503
5,300 International Integration Inc.(1) 100,866
1,200 Intraware, Inc.(1) 26,400
3,800 Keane, Inc.(1) 110,200
46,300 LibertyOne Limited ORD(1) 25,971
11,900 Logica plc ORD 110,335
2,434 London Bridge Software Holdings
plc ORD 63,922
12,444 Mandator AB ORD 85,327
1,000 Meitec ORD 30,614
17,000 Mentor Graphics Corp.(1) 214,094
43,000 Microsoft Corp.(1) 3,470,906
3,300 National Instruments Corp.(1) 125,297
Shares Value
- --------------------------------------------------------------------------------
4,800 NCR Corp.(1) $ 187,500
12,000 Novell, Inc.(1) 281,625
5,400 Open Text Corp.(1) 163,181
1,600 Oracle Corp.(1) 39,650
3,557 Ordina N.V. ORD(1) 90,078
4,900 Proxicom, Inc.(1) 101,981
1,700 QRS Corp.(1) 126,225
3,800 Sage Group plc (The) ORD 131,287
600 Sapient Corp.(1) 38,269
1,972 Sigma AB Cl B ORD 15,355
6,800 Sterling Software, Inc.(1) 165,325
1,500 Sumisho Computer Systems
Corp. ORD 50,117
3,500 Tieto Corp. Cl B ORD 122,192
28,600 Unisys Corp.(1) 1,085,012
1,193 Unit 4 ORD(1) 24,306
5,200 USWeb Corp.(1) 132,112
900 Veritas Software Corp.(1) 79,397
------------
11,953,493
------------
COMPUTER SYSTEMS--1.3%
18,500 Apple Computer, Inc.(1) 814,578
15,900 Compaq Computer Corp. 376,631
10,100 Dell Computer Corp.(1) 347,503
22,000 Fujitsu Ltd. ORD 365,716
2,000 Gateway 2000, Inc.(1) 121,625
10,200 Hewlett-Packard Co. 961,988
9,000 International Business
Machines Corp. 1,046,812
------------
4,034,853
------------
CONSTRUCTION & PROPERTY
DEVELOPMENT--0.2%
4,300 Centex Corp. 159,369
6,900 CRH plc ORD 117,786
1,100 Dycom Industries, Inc.(1) 53,075
7,300 Insituform Technologies, Inc. Cl A(1) 121,591
4,600 Lafarge Corp. 153,812
4,800 Pulte Corp. 114,300
------------
719,933
------------
CONSUMER PRODUCTS--1.0%
3,600 Avon Products, Inc. 177,975
2,200 Chattem, Inc.(1) 80,025
100 Clarins 8,598
2,300 Clorox Co. (The) 232,156
307 Fancl Corp. ORD 36,128
500 Gillette Company 25,500
4,700 Helen of Troy Ltd.(1) 74,466
19,000 Kao Corporation ORD 519,113
7,400 Procter & Gamble Co. (The) 690,975
24,000 Shiseido Co., Ltd. ORD 353,537
1,140 Tomy Company, Ltd. ORD 76,178
See Notes to Financial Statements
26 1-800-345-2021
Strategic Moderate--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
11,200 Whirlpool Corp. $ 722,400
1,000 World Co., Ltd. ORD 60,322
------------
3,057,373
------------
CONTROL & MEASUREMENT(2)
1,000 Orbotech Ltd.(1) 43,000
------------
DIVERSIFIED COMPANIES--2.0%
26,100 BBA Group plc ORD 184,317
4,650 Bodycote International plc ORD 62,549
6,500 Brambles Industries Limited ORD 173,273
4,900 DCC plc ORD 39,831
18,100 General Electric Co. (U.S.) 1,840,544
26,000 Keppel Telecommunications &
Transportation Ltd. ORD 35,571
18,200 Minnesota Mining &
Manufacturing Co. 1,560,650
26,500 Swire Pacific Ltd. Cl A ORD 126,439
16,800 Tyco International Ltd. 1,467,900
2,232 Unilever N.V. New York Shares 145,778
8,509 Vivendi ORD 629,603
29,000 Wharf (Holdings) Ltd. ORD 73,858
22,000 Wing Tai Holdings Ltd. ORD 24,742
------------
6,365,055
------------
EDUCATION(2)
800 Benesse Corporation ORD 68,864
------------
ELECTRICAL & ELECTRONIC
COMPONENTS--3.4%
5,300 Advanced Energy Industries, Inc.(1) 131,506
7,100 Aeroflex Inc.(1) 103,394
15,200 Arrow Electronics, Inc.(1) 264,100
4,500 ASM Lithography Holding N.V.
New York Shares(1) 198,281
21,800 Avnet, Inc. 949,662
900 Broadcom Corp. Cl A(1) 86,119
4,300 Celestica Inc.(1) 170,388
6,100 Conexant Systems, Inc.(1) 235,803
59,000 Datacraft Asia Limited ORD 210,040
5,600 DII Group, Inc.(1) 183,575
1,000 Hi/fn, Inc.(1) 57,844
33,000 Intel Corp. 1,788,188
3,000 KLA-Tencor Corporation(1) 136,594
20 Kudelski SA ORD 75,294
200 Linear Technology Corp. 10,594
3,700 Micron Technology, Inc.(1) 140,369
23,000 Natsteel Electronics Ltd. ORD 76,667
1,900 Optical Coating Laboratory, Inc. 123,381
2,400 Phillips Electronics N.V. New
York Shares(1) 206,400
8,400 Pinnacle Systems, Inc.(1) 432,075
1,800 PMC-Sierra, Inc.(1) 87,356
1,700 Qlogic Corp.(1) 186,788
Shares Value
- --------------------------------------------------------------------------------
2,300 Rockwell International Corp. $ 126,931
1,804 Samsung Electronics ORD 125,505
180 Samsung Electronics Rights ORD(1) 2,049
3,300 Sanmina Corp.(1) 247,603
4,200 Sawtek Inc.(1) 166,950
1,800 SGL CARBON Aktiengesellschaft
ORD(1) 125,683
2,400 Siemens AG ORD 161,325
1,784 Softbank S.A. GDR 57,534
7,900 Solectron Corp.(1) 432,525
5,300 Sony Corp. ORD 495,478
5,100 Teradyne, Inc.(1) 269,344
6,500 Texas Instruments Inc. 710,938
5,300 Thomas & Betts Corp. 226,906
6,000 Tokyo Electron Ltd. ORD 329,342
5,000 Uniphase Corp.(1) 671,719
5,500 Unitrode Corp.(1) 114,469
12,900 Vishay Intertechnology, Inc. 268,481
2,900 Xilinx, Inc.(1) 128,778
------------
10,515,978
------------
ENERGY (PRODUCTION & MARKETING)--2.9%
4,800 Anadarko Petroleum Corp. 180,000
18,800 Apache Corp. 676,800
15,900 Atlantic Richfield Co. 1,330,631
3,706 BP Amoco Plc ADR 397,005
28,000 Burlington Resources Inc. 1,202,250
4,200 Chevron Corp. 389,288
1,900 Elf Aquitaine SA ORD 274,836
19,900 Exxon Corp. 1,589,512
7,300 Mobil Corp. 739,125
16,500 Murphy Oil Corp. 809,531
11,900 Royal Dutch Petroleum Co. New
York Shares 673,094
2,700 Sunoco, Inc. 82,181
2,400 Texaco Inc. 157,200
11,800 Union Pacific Resources 164,462
6,400 Unocal Corp. 254,400
------------
8,920,315
------------
ENERGY (SERVICES)--0.4%
21,900 Baker Hughes Inc. 681,638
780 Daehan City Gas Co. ORD 23,811
2,300 IHC Caland N.V. ORD 90,485
7,500 Reliant Energy, Inc. 228,750
1,900 Schlumberger Ltd. 114,356
1,110 Seoul City Gas Co., Ltd. ORD 36,412
5,800 Tidewater Inc. 148,262
------------
1,323,714
------------
ENVIRONMENTAL SERVICES--0.1%
4,880 Waste Management, Inc. 258,030
------------
See Notes to Financial Statements
www.americancentury.com 27
Strategic Moderate--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
FINANCIAL SERVICES--2.6%
33,000 Amvescap Plc ORD $ 301,214
19,759 Banca Intesa S.p.A. ORD 100,488
5,400 Capital One Financial Corp. 813,712
13,300 CIT Group, Inc. (The) Cl A 385,700
3,300 Close Brothers Group plc ORD 36,331
1,700 Credit Suisse Group ORD 294,955
12,000 Fannie Mae 816,000
6,700 Federal Home Loan Mortgage
Corporation 390,694
3,100 Franklin Resources, Inc. 134,850
41,000 Grupo Financiero Banorte S.A.
de C.V. Cl O ORD(1) 52,190
6,804 ING Groep N.V. ORD 363,403
145 Julius Baer Holding AG ORD 438,603
3,828 Kempen & Company NV ORD 205,053
1,400 Lehman Brothers Holdings Inc. 76,475
17,800 Lloyds TSB Group plc ORD 235,158
9,700 Man (E D & F) Group plc ORD 50,560
3,900 Merrill Lynch & Co., Inc. 327,600
10,200 Morgan Stanley Dean Witter,
Discover & Co. 984,300
71,200 National Finance and Securities
Public Co., Ltd. Cl F ORD(1) 41,239
5,224 Provident Financial plc ORD 77,464
6,800 Providian Financial Corp. 652,375
4,300 Schwab (Charles) Corp. 454,994
300 Shohkoh Fund & Co., Ltd. ORD 166,893
25,800 Skandia Forsakrings AB ORD 442,269
100 Vontobel Holding AG Cl B ORD 163,682
------------
8,006,202
------------
FOOD & BEVERAGE--2.5%
3,200 American Italian Pasta Co. Cl A(1) 88,000
98,665 Archer-Daniels-Midland Co. 1,479,975
3,100 Coca-Cola Company (The) 211,769
14,100 Coca-Cola Enterprises, Inc. 511,125
8,700 Diageo plc ORD 91,462
5,000 Earthgrains Company 117,188
900 Groupe Danone ORD 247,615
4,200 Heineken NV ORD 233,296
2,800 Hormel Foods Corp. 110,950
9,800 IBP, Inc. 210,088
60,800 Interstate Bakeries Corp. 1,330,000
36,800 J.D. Wetherspoon plc ORD 184,155
4,200 Keebler Foods Co.(1) 140,700
13,000 Kirin Brewery Company, Ltd. ORD 148,599
142 Nestle S.A. ORD 255,207
500 Nong Shim Company
Limited ORD(1) 28,882
4,300 Panamerican Beverages Inc. Cl A 99,706
Shares Value
- --------------------------------------------------------------------------------
5,900 PepsiCo, Inc. $ 211,294
8,800 Quaker Oats Co. (The) 581,350
48,800 San Miguel Corporation Cl B ORD 109,656
2,000 Seagram Co. Ltd. (The) 103,875
7,400 Suiza Foods Corp.(1) 271,025
41,600 Tyson Foods, Inc. Cl A 956,800
------------
7,722,717
------------
FURNITURE & FURNISHINGS(2)
3,659 Dorel Industries Inc. Cl B ORD(1) 81,915
------------
HEALTHCARE--1.3%
16,400 Aetna Inc. 1,489,325
7,600 Apria Healthcare Group Inc.(1) 156,750
13,200 Beckman Coulter Inc. 669,900
54,900 Columbia/HCA Healthcare Corp. 1,293,581
8,000 Eisai Company, Ltd. ORD 148,459
5,700 Hooper Holmes, Inc. 103,312
2,400 PacifiCare Health Systems,
Inc. Cl B(1) 207,225
2,400 TLC The Laser Center Inc.(1) 105,300
------------
4,173,852
------------
INDUSTRIAL--0.1%
51,000 Invensys plc ORD 232,348
------------
INDUSTRIAL EQUIPMENT & MACHINERY--0.5%
5,700 Ashtead Group plc ORD 14,513
7,500 Ingersoll-Rand Co. 477,656
7,140 Mannesmann AG ORD 974,765
------------
1,466,934
------------
INSURANCE--2.2%
420 Allianz AG ORD 114,678
12,500 Allstate Corp. 455,469
4,400 American International Group, Inc. 502,975
2,993 ASR Verzekeringsgroep N.V. ORD 206,020
6,100 Assicurazioni Generali ORD 216,778
3,375 Axa-UAP ORD 388,657
1,800 Blanch (E.W.) Holdings, Inc. 115,200
16,600 Chubb Corp. (The) 1,163,038
24,600 CNA Financial Corp.(1) 1,068,562
4,700 Companhia de Seguros Mundial
Confianca, SA ORD(1) 135,090
1,970 Ethniki General Insurance
Co. ORD(1) 119,386
9,500 Fidelity National Financial, Inc. 160,906
10,800 First American Financial Corp.
(The) 177,525
5,150 Fortis AG ORD 165,037
4,400 Gallagher (Arthur J.) & Co. 214,225
3,700 LandAmerica Financial Group, Inc. 106,144
8,800 Lincoln National Corp. 895,400
See Notes to Financial Statements
28 1-800-345-2021
Strategic Moderate--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
4,400 Loews Corp. $ 357,775
28,800 Mediolanum SpA ORD 195,991
600 Pohjola Group Insurance Corp.
Cl B ORD 27,513
76,160 Premafin Finanziaria S.p.A. ORD(1) 48,257
1,800 Sampo Insurance Co.
plc Cl A ORD 54,400
------------
6,889,026
------------
LEISURE--0.7%
565 Accor SA ORD 138,489
1,800 Anchor Gaming(1) 80,719
9,900 Circus Circus Enterprises, Inc.(1) 209,138
12,200 Eastman Kodak Co. 825,025
15,600 NH Hoteles, S.A. ORD(1) 199,155
7,200 Mirage Resorts, Inc.(1) 147,600
100 Moevenpick Holding AG Bearer
ORD 45,831
6,700 Park Place Entertainment Corp.(1) 70,350
9,500 Viacom, Inc. Cl B(1) 365,750
------------
2,082,057
------------
MACHINERY & EQUIPMENT--1.0%
350 ABB AG ORD(1) 495,662
500 Aixtron AG ORD 109,426
7,000 Brooks Automation, Inc.(1) 128,188
4,300 Case Corp. 202,100
21,100 Cooper Industries, Inc. 1,045,769
100 Georg Fischer AG ORD 32,605
4,500 Lam Research Corp.(1) 124,734
10,300 Premark International, Inc. 368,869
4,000 PRI Automation, Inc.(1) 98,000
1,700 Sidel SA ORD 235,630
500 Swisslog Holding AG ORD 58,926
1,000 UNION TOOL CO. ORD 63,367
------------
2,963,276
------------
MEDICAL EQUIPMENT & SUPPLIES--0.8%
1,200 Andrx Corp.(1) 120,712
2,200 Bard (C.R.), Inc. 100,512
7,300 Boston Scientific Corp.(1) 276,944
1,800 Closure Medical Corp.(1) 55,856
9,700 CONMED Corp.(1) 329,497
8,700 Guidant Corp. 435,000
5,000 Hillenbrand Industries, Inc. 209,688
4,000 IDEXX Laboratories, Inc.(1) 101,750
4,500 KeraVision, Inc.(1) 44,719
1,900 Novoste Corp.(1) 48,509
3,300 Ocular Sciences, Inc.(1) 100,959
3,050 Priority Healthcare Corp. Cl B(1) 104,653
7,200 VISX, Inc.(1) 373,725
4,100 Wesley Jessen VisionCare, Inc.(1) 127,228
3,500 Xomed Surgical Products, Inc.(1) 143,281
------------
2,573,033
------------
Shares Value
- --------------------------------------------------------------------------------
METALS & MINING--0.2%
5,132 Aalberts Industries N.V. ORD $ 112,315
4,500 Alcoa Inc. 247,500
19,200 Broken Hill Proprietary Co.
Ltd. ORD 196,965
------------
556,780
------------
OFFICE EQUIPMENT & SUPPLIES--0.1%
6,600 Electronics for Imaging, Inc.(1) 323,606
800 Sindo Ricoh Co. ORD 33,731
------------
357,337
------------
PACKAGING & CONTAINERS--0.2%
400 Fuji Seal, Inc. ORD 36,210
21,500 Tenneco Inc. 501,219
------------
537,429
------------
PAPER & FOREST PRODUCTS--0.5%
600 Chesapeake Corp. 21,638
8,900 Consolidated Papers, Inc. 246,975
1,700 Georgia-Pacific Corp. 146,944
4,858 International Paper Co. 242,900
5,400 Rayonier, Inc. 251,775
17,500 Westvaco Corp. 499,844
1,400 Weyerhaeuser Co. 86,888
2,000 Willamette Industries, Inc. 84,750
------------
1,581,714
------------
PHARMACEUTICALS--2.6%
4,800 American Home Products Corp. 276,600
5,200 AstraZeneca Group plc ORD 206,593
13,700 Bristol-Myers Squibb Co. 940,162
6,100 ChiRex Inc.(1) 183,953
6,000 Forest Laboratories, Inc.(1) 285,750
7,900 Genentech, Inc.(1) 691,744
5,400 Glaxo Wellcome plc ORD 151,501
4,100 Johnson & Johnson 379,762
3,600 Lilly (Eli) & Co. 257,175
2,200 Merck & Co., Inc. 148,500
180 Novartis AG ORD 261,158
6,900 Pfizer, Inc. 738,300
9,200 Pharmacia & Upjohn Inc. 510,025
3,401 Pliva d.d. GDR 55,096
500 QLT PhotoTherapeutics Inc.(1) 21,859
3,200 QLT PhotoTherapeutics Inc. ORD(1) 140,782
32,700 Schering-Plough Corp. 1,473,544
4,000 Shire Pharmaceuticals Group
PLC ORD(1) 31,483
63,800 SkyePharma plc ORD(1) 57,213
7,000 Takeda Chemical Inds. ORD 309,345
3,600 UCB SA ORD 154,909
14,800 Warner-Lambert Co. 917,600
------------
8,193,054
------------
See Notes to Financial Statements
www.americancentury.com 29
Strategic Moderate--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
PRINTING & PUBLISHING--0.8%
16,700 Banta Corp. $ 409,150
16,900 Deluxe Corp. 609,456
8,100 Gruppo Editoriale L'Espresso ORD 133,374
17,400 Mondadori (Arnoldo) Editore
SpA ORD 301,921
12,800 Pearson plc ORD 243,918
79,200 Seat Pagine Gialle SpA ORD 107,712
13,750 Singapore Press Holdings Ltd.
ORD 188,116
6,000 Toppan Forms Co., Ltd. ORD 113,072
6,300 VNU N.V. ORD 267,218
5,648 Wolters Kluwer NV ORD 226,908
------------
2,600,845
------------
RAILROAD--0.2%
1,600 Canadian National Railway
Company ORD 102,357
11,300 CSX Corp. 530,394
------------
632,751
------------
REAL ESTATE--0.3%
2,200 Arden Realty, Inc. 56,238
11,000 Cheung Kong (Holdings) Ltd. ORD 89,365
23,300 City Developments Limited ORD 139,125
10,100 Corporacion GEO, S.A. de C.V.
Series B ORD(1) 39,162
42,000 DBS Land Limited ORD 74,504
1,200 Equity Residential Properties Trust 57,525
14,000 Henderson Land Development
Company Ltd. ORD 70,589
2,300 Hospitality Properties Trust(1) 62,388
47,000 Keppel Land Ltd. ORD 79,832
2,700 Prologis Trust 55,181
2,000 Simon Property Group, Inc. 58,500
23,000 Singapore Land Limited ORD 63,200
------------
845,609
------------
RESTAURANTS--0.5%
46,600 CBRL Group, Inc. 805,306
15,900 Foodmaker, Inc.(1) 429,300
3,100 McDonald's Corp. 119,350
3,800 PizzaExpress plc ORD 56,592
5,700 PJ America, Inc.(1) 133,772
4,000 Skylark Co., Ltd. ORD 74,723
------------
1,619,043
------------
RETAIL (APPAREL)--0.5%
9,800 AnnTaylor Stores Corp.(1) 423,238
3,600 Chico's FAS, Inc.(1) 81,450
2,600 Children's Place Retail Stores, Inc.
(The)(1) 100,669
5,700 DM Management Co.(1) 91,734
700 Fast Retailing Co. Ltd. ORD 33,988
Shares Value
- --------------------------------------------------------------------------------
2,700 Gucci Group N.V. New York Shares $ 178,538
21,200 Hennes & Mauritz AB Cl B ORD 475,519
2,089 Matalan PLC ORD(1) 27,899
------------
1,413,035
------------
RETAIL (FOOD & DRUG)--0.3%
4,400 CVS Corp. 202,400
5,786 Koninklijke Ahold NV ORD 201,699
11,000 Safeway Inc.(1) 511,500
5,800 Universal Corp. 151,525
------------
1,067,124
------------
RETAIL (GENERAL MERCHANDISE)--1.7%
5,400 Ames Department Stores, Inc.(1) 221,231
1,320 Carrefour SA ORD 173,055
15,200 Dillard's Inc. Cl A 533,900
100 Don Quijote Co., Ltd. ORD(1) 28,803
2,500 Douglas Holding AG ORD 106,820
4,000 Fred's, Inc. 52,250
200 Galeries Lafayette ORD 289,718
4,400 Grupo Elektra, S.A. de C.V. GDR 23,925
2,200 Homac Corp. ORD 45,624
1,500 Lands' End, Inc.(1) 64,125
6,100 May Department Stores Co. (The) 264,206
11,400 Next Plc ORD 132,443
12,600 Penney (J.C.) Company, Inc. 651,262
1,900 Pinault-Printemps-Redoute
SA ORD 323,348
400 Ryohin Keikaku Co. Limited ORD 78,311
2,400 Shinsegae Department Store
Co. ORD 107,265
4,400 ShopKo Stores, Inc.(1) 156,200
47,600 Wal-Mart Stores, Inc. 2,028,950
------------
5,281,436
------------
RETAIL (INTERNET)(2)
600 eBay Inc.(1) 106,256
------------
RETAIL (SPECIALTY)--0.9%
3,300 Best Buy Co., Inc.(1) 150,150
4,500 Circuit City Stores-Circuit
City Group 323,156
4,400 DeoDeo Corporation ORD 43,451
9,642 Dixons Group plc ORD 173,085
15,000 Home Depot, Inc. 853,125
9,000 Starbucks Corp.(1) 332,156
9,100 Sunglass Hut International, Inc.(1) 138,206
400 TAG Heuer International SA ORD(1) 37,058
11,600 Toys 'R' Us, Inc.(1) 267,525
5,400 Tractor Supply Co.(1) 160,312
5,000 Yamada Denki ORD 206,970
4,200 Zale Corp.(1) 161,962
------------
2,847,156
------------
See Notes to Financial Statements
30 1-800-345-2021
Strategic Moderate--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
STEEL(2)
11,300 Hylsamex S.A. ORD(1) $ 24,904
------------
TELEPHONE COMMUNICATIONS--4.7%
21,800 AAPT Limited ORD(1) 78,774
800 Aliant Communications, Inc. 37,600
7,600 ALLTEL Corp. 544,825
7,200 Ameritech Corp. 473,850
15,500 AT&T Corp. 860,250
10,600 Bell Atlantic Corp. 580,350
48,500 BellSouth Corp. 2,288,594
32,276 British Telecommunications
plc ORD 538,043
29,100 Cable & Wireless Communications
plc ORD(1) 276,334
43,493 Cable & Wireless Optus
Limited ORD(1) 83,119
19,568 COLT Telecom Group plc ORD(1) 412,998
400 Dacom Corp. ORD 28,874
85 Dacom Corp. Rights ORD(1) 1,864
8,278 Energis plc ORD(1) 199,635
7,400 Esat Telecom Group PLC ADR(1) 273,338
2,700 Global TeleSystems Group, Inc.(1) 204,947
24,300 GTE Corp. 1,532,419
2,400 Intermedia Communications Inc.(1) 60,525
4 Japan Telecom Co. Ltd. ORD 48,718
5,700 MCI WorldCom, Inc.(1) 492,159
36 Nippon Telegraph & Telephone
ORD 349,586
196,500 PT Telekomunikasi Indonesia ORD 91,353
1,500 RSL Communications, Ltd. Cl A(1) 33,844
39,700 SBC Communications Inc. 2,029,662
150 SK Telecom Co. Ltd. ADR 2,138
4,353 Sonera Group Oyj ORD 85,059
5,000 Sprint Corp. 563,750
364 Swisscom AG ORD(1) 131,077
1,600 Tele Danmark A/S ORD 163,183
34,500 Telecom Italia SpA ORD 355,227
11,719 Telefonica S.A. ORD(1) 561,552
4,200 Telefonos de Mexico,
S.A. Cl L ADR 335,738
2,700 Teleglobe Inc. ORD 81,693
6,800 Telesp Participacoes S.A. ADR 148,750
1,103 Telinfo NV ORD 126,062
6,900 U S WEST, Inc. 373,031
6,600 Viatel, Inc.(1) 296,175
------------
14,745,096
------------
TEXTILES & APPAREL--0.2%
4,700 Dexter Corp. (The) 182,125
3,600 Polymer Group, Inc.(1) 44,100
1,700 Quiksilver, Inc.(1) 48,450
Shares Value
- --------------------------------------------------------------------------------
2,500 Tommy Hilfiger Corp.(1) $ 187,656
4,200 VF Corp. 193,200
------------
655,531
------------
TOBACCO--0.5%
3,500 Fortune Brands, Inc. 143,062
16,000 Imperial Tobacco Group plc ORD 179,864
7,700 Philip Morris Companies Inc. 296,931
30,900 UST Inc. 942,450
------------
1,562,307
------------
TRANSPORTATION--0.3%
5,300 Atlas Air, Inc.(1) 142,438
2,900 Eagle USA Airfreight, Inc.(1) 136,844
4,700 Forward Air Corp.(1) 128,222
7,800 Go-Ahead Group PLC (The) ORD 110,104
4,200 Hertz Corp. Cl A 230,738
24,000 Sembcorp Logistics Limited ORD(1) 70,957
------------
819,303
------------
UTILITIES--2.1%
2,600 AES Corp. (The)(1) 129,350
28,700 AGL Resources Inc. 541,712
19,900 Ameren Corp. 814,656
2,500 Calpine Corp.(1) 135,469
79,600 Cogeneration Public Co.,
Ltd. ORD(1) 60,043
19,700 Florida Progress Corp. 826,169
26,900 FPL Group, Inc. 1,565,244
4,900 KN Energy, Inc. 105,044
2,400 Korea Electric Power Corp. ORD 73,466
8,100 LG&E Energy Corp. 184,781
10,300 Minnesota Power & Light Co. 221,450
5,100 Northeast Utilities(1) 89,888
9,800 Sempra Energy 210,700
11,100 Sierra Pacific Resources 403,762
12,900 Southern Co. 366,038
8,800 Texas Utilities Co. 396,000
8,500 Utilicorp United Inc. 211,969
1,273 Vestas Wind Systems A/S ORD(1) 87,387
------------
6,423,128
------------
WIRELESS COMMUNICATIONS--1.1%
14,300 AirTouch Communications, Inc.(1) 1,437,150
12,000 Europolitan Holdings AB ORD 103,899
1,900 Nextel Communications, Inc.(1) 70,003
7,400 Nokia Corp. ADR Cl A 525,400
6 NTT Mobile Communication
Network, Inc. ORD 326,379
9,300 Orange plc ORD(1) 128,672
869 Panafon SA ORD(1) 21,595
9,300 Pinnacle Holdings Inc.(1) 168,272
See Notes to Financial Statements
www.americancentury.com 31
Strategic Moderate--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
Shares/Principal Amount Value
- --------------------------------------------------------------------------------
2,100 Sprint PCS(1) $ 94,500
27,700 Vodafone Group plc ORD 527,409
3,300 VoiceStream Wireless Corp.(1) 89,100
3,400 Western Wireless Corp. Cl A(1) 83,194
------------
3,575,573
------------
TOTAL COMMON STOCKS & RIGHTS 188,664,432
------------
(Cost $152,835,905)
PREFERRED STOCKS--0.3%
ENERGY (PRODUCTION & MARKETING)--0.1%
1,250,000 Petroleo Brasileiro S.A. ORD 176,097
------------
FINANCIAL SERVICES--0.2%
948 Marschollek, Lautenschlaeger und
Partner AG ORD 493,979
------------
RETAIL (SPECIALTY)(2)
1,700 Fielmann AG ORD 66,260
------------
TELEPHONE COMMUNICATIONS(2)
6,600,000 Embratel Participacoes S.A. ORD 91,455
------------
UTILITIES(2)
7,200,000 Centrais Electricas Brasileiras
S.A. Cl B ORD 150,901
------------
WIRELESS COMMUNICATIONS(2)
18,100,000 Tele Sudeste Celular
Participacoes S.A. ORD 85,797
------------
TOTAL PREFERRED STOCKS 1,064,489
------------
(Cost $719,527)
U.S. TREASURY SECURITIES--5.2%
$1,300,000 U.S. Treasury Notes, 7.75%,
11/30/99 1,318,299
4,750,000 U.S. Treasury Notes, 5.50%,
3/31/00 4,767,960
3,425,000 U.S. Treasury Notes, 6.625%,
7/31/01 3,506,537
2,000,000 U.S. Treasury Notes, 4.75%,
2/15/04 1,930,343
500,000 U.S. Treasury Notes, 7.875%,
11/15/04 548,874
750,000 U.S. Treasury Notes, 4.75%,
11/15/08 697,938
700,000 U.S. Treasury Notes, 5.50%,
5/15/09 693,640
1,200,000 U.S. Treasury Bonds, 8.75%,
5/15/17 1,539,349
150,000 U.S. Treasury Bonds, 7.875%,
2/15/21 181,165
800,000 U.S. Treasury Bonds, 6.125%,
11/15/27 809,157
Principal Amount Value
- --------------------------------------------------------------------------------
$ 400,000 U.S. Treasury Bonds, 5.25%,
11/15/28 $ 362,322
------------
TOTAL U.S. TREASURY SECURITIES 16,355,584
------------
(Cost $16,502,763)
U.S. GOVERNMENT AGENCY SECURITIES--2.7%
3,300,000 FHLB, 5.05%, 3/1/00 3,293,499
500,000 FNMA, 5.25%, 1/15/03 488,075
3,300,000 FNMA MTN, 6.23%, 7/21/08 3,205,871
1,500,000 SLMA MTN, VRN, 5.22%,
6/1/99 resets weekly off the
3-month T-Bill plus 0.60%
with no caps 1,501,755
------------
TOTAL U.S. GOVERNMENT
AGENCY SECURITIES 8,489,200
------------
(Cost $8,599,932)
SOVEREIGN GOVERNMENTS & AGENCIES--5.6%
AUD 1,360,000 Australian Government,
9.50%, 8/15/03 1,014,230
USD 200,000 Province of British Columbia,
5.375%, 10/29/08 184,868
EURO 1,899,196 Deutschland Republic,
4.75%, 7/4/98 1,879,295
EURO 6,494,851 Deutschland Republic,
6.00%, 9/15/03 7,493,527
CAD 560,000 Government of Canada,
5.00%, 3/15/00 379,947
CAD 1,000,000 Government of Canada,
6.00%, 6/1/08 705,180
JPY 300,000,000 Japan Global, 3.30%,
6/20/06 2,829,280
DKK 4,100,000 Kingdom of Denmark,
8.00%, 3/15/06 700,469
GBP 200,000 U.K. Treasury Bonds, 7.50%,
12/7/06 368,791
GBP 900,000 U.K. Treasury Bonds, 9.00%,
8/6/12 1,991,759
------------
TOTAL SOVEREIGN GOVERNMENTS
& AGENCIES 17,547,346
------------
(Cost $18,766,139)
MORTGAGE-BACKED SECURITIES(3)--4.3%
230,334 FHLMC Pool #E68523, 6.50%,
12/1/12 230,337
50,342 FHLMC Pool #C00465, 8.00%,
6/1/26 52,365
220,523 FHLMC Pool #D72306, 8.00%,
6/1/26 229,382
91,254 FHLMC Pool #D72431, 8.00%,
6/1/26 94,920
See Notes to Financial Statements
32 1-800-345-2021
Strategic Moderate--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
Principal Amount Value
- --------------------------------------------------------------------------------
$ 158,622 FHLMC Pool #D72499, 8.00%,
7/1/26 $ 164,994
723,415 FNMA Pool #373899, 6.50%,
3/1/12 721,918
140,990 FNMA Pool #125477, 6.50%,
4/1/12 140,698
656,172 FNMA Pool #369085, 6.50%,
4/1/12 654,814
37,662 FNMA Pool #377181, 6.50%,
4/1/12 37,584
481,060 FNMA Pool #377379, 6.50%,
4/1/12 480,065
160,449 FNMA Pool #341078, 7.00%,
5/1/26 160,998
267,776 FNMA Pool #250576, 7.00%,
6/1/26 268,693
507,351 FNMA Pool #373510, 7.50%,
3/1/27 519,000
1,083,419 FNMA Pool #412562, 6.50%,
1/1/28 1,061,189
175,542 GNMA Pool #397233, 9.50%,
2/20/25 188,093
50,797 GNMA Pool #392995, 8.75%,
3/15/25 54,022
116,899 GNMA Pool #001991, 9.00%,
4/20/25 123,787
207,717 GNMA Pool #416856, 7.50%,
10/15/25 212,864
124,806 GNMA Pool #421254, 7.50%,
11/15/25 127,898
26,492 GNMA Pool #373704, 6.00%,
4/15/26 25,241
218,045 GNMA Pool #416761, 7.50%,
6/15/26 223,416
756,965 GNMA Pool #456569, 7.50%,
11/15/27 775,490
909,238 GNMA Pool #457351, 7.00%,
12/15/27 912,208
1,143,675 GNMA Pool #449491, 7.50%,
12/15/27 1,171,665
467,365 GNMA Pool #461623, 6.50%,
1/15/28 456,666
603,455 GNMA Pool #450628, 6.50%,
3/15/28 589,641
28,059 GNMA Pool #421388, 6.00%,
4/15/26 26,734
1,473,539 GNMA Pool #466804, 6.50%,
4/15/28 1,439,808
456,774 GNMA Pool #454559, 6.00%,
5/15/28 433,712
421,811 GNMA Pool #474782, 6.00%,
5/15/28 400,514
387,081 GNMA Pool #403868, 6.50%,
5/15/28 378,221
Principal Amount Value
- --------------------------------------------------------------------------------
$ 60,531 GNMA Pool #403912, 6.50%,
5/15/28 $ 59,146
61,878 GNMA Pool #465798, 6.50%,
5/15/28 60,462
484,937 GNMA Pool #475802, 6.00%,
7/15/28 460,453
497,301 GNMA Pool #438917, 6.00%,
8/15/28 472,193
------------
TOTAL MORTGAGE-BACKED SECURITIES 13,409,191
------------
(Cost $17,409,447)
ASSET-BACKED SECURITIES(3)--1.7%
1,200,000 AMRESCO, INC., Series 1998-2,
Class A4 SEQ, 6.45%, 4/25/27 1,187,778
300,000 Comed Transitional Funding Trust,
Series 1998-1, Class A6 SEQ,
5.63%, 6/25/09 285,196
900,000 GMAC Commercial Mortgage
Securities Inc., Series 1999 C1,
Class A2 SEQ, 6.18%, 5/15/33 865,354
381,253 Money Store (The) Home Equity
Trust, Series 1995 C, Class A9
SEQ, 6.375%, 9/15/11 382,483
500,000 Money Store (The) Home Equity
Trust, Series 1997 C, Class
AF4 SEQ, 6.37%, 8/15/17 502,022
300,000 Money Store (The) Home Equity
Trust, Series 1997 C, Class
AF6 SEQ, 6.67%, 2/15/25 302,102
567,889 Morgan Stanley Capital I,
Series 1998 WF1, Class
A1 SEQ, 6.25%, 7/15/07 561,452
387,614 Nationslink Funding Corp.,
Series 1998-2, Class A1 SEQ,
6.00%, 11/20/07 378,992
300,000 Nationslink Funding Corp.,
Series 1999-1, Class A2 SEQ,
6.32%, 11/20/08 291,454
108,227 Textron Financial Corp. Receivables
Trust, Series 1997 A, Class A,
6.05%, 3/16/09 (Acquired
9/18/97, Cost $108,084)(4) 108,451
300,000 United Companies Financial Corp.,
Home Equity Loan, Series
1997 C, Class A7, 6.85%,
1/15/29 301,646
------------
TOTAL ASSET-BACKED SECURITIES 5,166,930
------------
(Cost $5,264,974)
See Notes to Financial Statements
www.americancentury.com 33
Strategic Moderate--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
Principal Amount Value
- --------------------------------------------------------------------------------
CORPORATE BONDS--11.8%
AEROSPACE & DEFENSE--0.1%
$ 400,000 Lockheed Martin Corp., 6.85%,
5/15/01 $ 404,834
------------
AIRLINES--0.2%
500,000 Continental Airlines, Inc., 8.00%,
12/15/05 498,125
------------
AUTOMOBILES & AUTO PARTS--0.2%
550,000 Lear Corp., 7.96%, 5/15/05
(Acquired 5/13/99, Cost
$550,000)(4) 550,000
250,000 Stanadyne Automotive Corp.,
Series B, 10.25%, 12/15/07
(Acquired 7/22/98, Cost
$258,125)(4) 232,500
------------
782,500
------------
BANKING--1.9%
2,000,000 American Express Centurion Bank,
VRN, 4.85%, 6/18/99 resets
monthly off the 1-month LIBOR
minus 0.055% with no caps 1,999,980
500,000 Bay View Capital Corp., 9.125%,
8/15/02 465,000
400,000 Citigroup Inc., 7.125%, 5/15/06 404,882
650,000 First Bank System Inc., 7.625%,
5/1/05 680,182
1,000,000 KeyBank N.A., VRN, 4.72%,
6/1/99 resets daily off the
Fed Funds rate plus
0.22% with no caps 1,000,000
500,000 NationsBank Corporation, 6.125%,
7/15/04 495,536
1,000,000 NationsBank, N.A., VRN, 5.09%,
6/1/99 resets daily
off the Fed Funds rate plus 0.22%
with no caps 1,000,180
------------
6,045,760
------------
BROADCASTING & MEDIA--0.4%
300,000 British Sky Broadcasting, 6.875%,
2/23/09 286,974
500,000 Charter Communication Holdings
LLC, 8.625%, 4/1/09 (Acquired
3/12/99, Cost $498,475)(4) 492,500
250,000 Fox Family Worldwide Inc., 9.25%,
11/1/07 240,000
250,000 Imax Corp., 7.875%, 12/1/05 242,188
100,000 Tele-Communications Inc., 8.25%,
1/15/03 105,911
------------
1,367,573
------------
Principal Amount Value
- --------------------------------------------------------------------------------
CHEMICALS & RESINS--0.3%
$ 250,000 Lyondell Chemical Co., Series B,
9.875%, 5/1/07 (Acquired
5/11/99, Cost $253,750)(4) $ 253,438
450,000 Monsanto Co., 6.60%, 12/1/28
(Acquired 12/4/98-3/11/99,
Cost $444,900)(4) 414,081
250,000 Scotts Co. (The), 8.675%, 1/15/09
(Acquired 1/14/99, Cost
$250,000)(4) 252,188
------------
919,707
------------
COMPUTER SOFTWARE & SERVICES--0.1%
250,000 Unisys Corp., 12.00%, 4/15/03 274,062
------------
DIVERSIFIED COMPANIES--0.1%
300,000 Hutchison Whampoa Financial,
7.50%, 8/1/27 (Acquired
4/7/99, Cost $260,577)(4) 261,490
------------
ELECTRICAL & ELECTRONIC
COMPONENTS--0.2%
250,000 DII Group, Inc., 8.50%, 9/15/07
(Acquired 9/17/97, Cost
$250,000)(4) 251,562
250,000 Flextronics International Ltd.,
Series B, 8.75%, 10/15/07 251,562
250,000 Trench Electric & Trench Inc.,
10.25%, 12/15/07 247,188
------------
750,312
------------
ENERGY (PRODUCTION & MARKETING)--0.9%
250,000 Belco Oil & Gas Corp., 8.875%,
9/15/07 245,000
400,000 Enron Corp., 6.625%, 11/15/05 392,300
500,000 Ocean Energy, Inc., 9.75%,
10/1/06 515,625
750,000 Oryx Energy Co., 8.375%,
7/15/04 797,253
200,000 Triton Energy Ltd., 8.75%,
4/15/02 199,500
600,000 USX Corp., 6.65%, 2/1/06 582,087
------------
2,731,765
------------
ENERGY (SERVICES)--0.3%
500,000 Cliffs Drilling Company, 10.25%,
5/15/03 505,625
400,000 Petroleum Geo-Services ASA,
7.125%, 3/30/28 374,763
------------
880,388
------------
FINANCIAL SERVICES--1.8%
400,000 Comdisco Inc., 7.75%, 9/1/99 401,937
600,000 Ford Motor Credit Co., 6.55%,
9/10/02 604,295
2,000,000 GMAC, 8.00%, 10/1/99 2,018,575
250,000 Intertek Finance PLC, Series B,
10.25%, 11/1/06 244,062
See Notes to Financial Statements
34 1-800-345-2021
Strategic Moderate--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
Principal Amount Value
- --------------------------------------------------------------------------------
$ 500,000 Metris Companies Inc., 10.00%,
11/1/04 $ 511,250
2,000,000 USL Capital Corp. MTN, Series D,
6.18%, 11/8/99 2,006,708
------------
5,786,827
------------
FOOD & BEVERAGE--0.4%
600,000 Pepsi Bottling Group Inc., 5.625%,
2/17/09 (Acquired 2/3/99,
Cost $597,402)(4) 559,732
600,000 Pepsi Bottling Group Inc., 7.00%,
3/1/29 (Acquired 3/12/99,
Cost $498,475)(4) 581,704
------------
1,141,436
------------
HEALTHCARE--0.1%
400,000 Aetna Services, Inc., 6.75%,
8/15/01 402,780
------------
INSURANCE--0.2%
600,000 Conseco Inc., 6.40%, 6/15/01 588,841
------------
LEISURE--0.1%
100,000 Paramount Communications, Inc.,
7.50%, 1/15/02 102,072
100,000 Time Warner Inc., 8.11%,
8/15/06 107,110
------------
209,182
------------
MACHINERY & EQUIPMENT--0.2%
500,000 United Rentals, Inc., Series B,
9.50%, 6/1/08 508,125
------------
METALS & MINING--0.3%
100,000 Alcan Aluminium Ltd., 5.875%,
4/1/00 100,258
300,000 Barrick Gold Corp., 7.50%,
5/1/07 309,517
250,000 Golden Northwest Aluminum,
12.00%, 12/15/06 (Acquired
12/14/98, Cost $250,000)(4) 257,500
250,000 Kaiser Aluminum & Chemical,
12.75%, 2/1/98 254,375
------------
921,650
------------
OFFICE EQUIPMENT & SUPPLIES--0.3%
250,000 Fisher Scientific International Inc.,
7.125%, 12/15/05 238,438
250,000 Fisher Scientific International Inc.,
9.00%, 2/1/08 242,500
350,000 Xerox Capital Trust, 8.00%,
2/1/27 (Acquired 7/17/97,
Cost $364,084)(4) 358,640
------------
839,578
------------
PACKAGING & CONTAINERS--0.2%
550,000 Owens-Illinois Inc., 7.15%,
5/15/05 529,926
------------
Principal Amount Value
- --------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS--0.2%
$ 150,000 Domtar, Inc. 8.75%, 8/1/06 $ 155,812
600,000 Fort James Corp., 6.625%,
9/15/04 602,434
------------
758,246
------------
RAILROAD--0.2%
450,000 Norfolk Southern Corp., 7.90%,
5/15/97 476,492
------------
REAL ESTATE--0.2%
400,000 Chelsea GCA Realty Partners,
7.25%, 10/21/07 378,850
300,000 Spieker Properties, Inc., 6.80%,
12/15/01 300,265
------------
679,115
------------
RETAIL (FOOD & DRUG)--0.3%
550,000 Rite Aid Corp., 6.70%, 12/15/01 551,499
500,000 Rite Aid Corp., 6.125%, 12/15/08
(Acquired 1/6/99, Cost
$503,160)(4) 460,454
------------
1,011,953
------------
RETAIL (SPECIALTY)--0.2%
500,000 Sonic Automotive, Inc., Series B,
11.00%, 8/1/08 496,250
------------
STEEL--0.2%
250,000 Armco Inc., 9.00%, 9/15/07
(Acquired 9/9/97, Cost
$248,700)(4) 259,062
550,000 Pohang Iron & Steel Co., Ltd.,
7.375%, 5/15/05 525,955
------------
785,017
------------
TELEPHONE COMMUNICATIONS--1.3%
1,000,000 Cable & Wireless Communications
plc, 6.625%, 3/6/05 984,186
300,000 Cincinnati Bell Inc., 6.30%,
12/1/28 272,905
550,000 GTE North Inc., Series H, 5.65%,
11/15/08 513,670
400,000 MCI WorldCom, Inc., 7.55%,
4/1/04 414,605
300,000 MCI WorldCom, Inc., 6.40%,
8/15/05 294,417
250,000 Qwest Communications
International Inc., Series B,
8.29%, 2/1/03(5) 192,188
1,250,000 Qwest Communications
International Inc., Series B,
7.50%, 11/1/08 1,263,298
300,000 Sprint Capital Corp., 6.875%,
11/15/28 282,225
------------
4,217,494
------------
See Notes to Financial Statements
www.americancentury.com 35
Strategic Moderate--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
Principal Amount Value
- --------------------------------------------------------------------------------
TRANSPORTATION--0.1%
$ 250,000 Atlas Air, Inc., 10.75%, 8/1/05 $ 258,750
------------
UTILITIES--0.4%
500,000 Georgia Power Co., 5.50%,
12/1/05 473,342
400,000 PG&E Corp., 6.25%, 3/1/04 398,981
300,000 Southern Investments UK, 6.80%,
12/1/06 297,060
------------
1,169,383
------------
WIRELESS COMMUNICATIONS--0.4%
250,000 360 Communications Co.,
7.125%, 3/1/03 255,167
250,000 Orange plc, 8.00%, 8/1/08 245,000
600,000 TCI Communications, Inc., 8.75%,
8/1/15 708,328
------------
1,208,495
------------
TOTAL CORPORATE BONDS 36,906,056
------------
(Cost $36,405,676)
COMMERCIAL PAPER(6)--5.9%
BANKING--0.7%
2,000,000 Banque National de Paris, 4.82%,
6/15/99 1,995,141
------------
ENERGY (PRODUCTION & MARKETING)--0.9%
1,700,000 Motiva Enterprises LLC, 4.90%,
8/26/99 (Acquired 5/28/99,
Cost $1,679,175)(4) 1,679,015
1,150,000 Statoil-Den Norske Stats, 4.79%,
6/17/99 (Acquired 5/13/99,
Cost $1,144,645)(4) 1,146,897
------------
2,825,912
------------
FINANCIAL SERVICES--2.5%
800,000 Abbey National North America
Corp., 4.83%, 8/9/99 792,026
1,700,000 Credit Suisse First Boston Inc.,
4.90%, 9/1/99 (Acquired
5/25/99, Cost $1,677,324)(4) 1,677,594
1,700,000 Falcon Asset Securities Corp.,
4.85%, 7/7/99 (Acquired
5/25/99, Cost $1,690,152)(4) 1,690,810
1,357,000 Quincy Capital Corp., 4.82%,
6/22/99 (Acquired 5/25/99,
Cost $1,351,913)(4) 1,352,426
500,000 UBS Finance (Delaware) Inc.,
4.92%, 10/12/99 490,526
1,700,000 Windmill Funding Corp., 4.82%,
7/14/99 (Acquired 5/13/99,
Cost $1,685,888)(4) 1,689,176
------------
7,692,558
------------
Principal Amount Value
- --------------------------------------------------------------------------------
FOOD & BEVERAGE--0.3%
$1,000,000 Hershey Foods Corp., 4.85%,
9/3/99 (Acquired 5/28/99,
Cost $986,797)(4) $ 986,542
------------
INDUSTRIAL--0.5%
1,700,000 Siebe plc, 4.82%, 8/11/99
(Acquired 5/13/99, Cost
$1,679,515)(4) 1,682,582
------------
INSURANCE--0.6%
1,700,000 Transamerica Occidental Life
Insurance Co., 4.82%, 7/19/99
(Acquired 5/13/99, Cost
$1,684,750)(4) 1,688,005
------------
METALS & MINING--0.4%
1,400,000 Rio Tinto America Inc., 4.81%,
6/17/99 (Acquired 5/25/99,
Cost $1,395,698)(4) 1,396,223
------------
TOTAL COMMERCIAL PAPER 18,266,963
------------
(Cost $18,260,611)
TEMPORARY CASH INVESTMENTS--2.2%
Repurchase Agreement, Merrill Lynch & Co.,
Inc., (U.S. Treasury obligations), in a joint
trading account at 4.75%, dated 5/28/99,
due 6/1/99 (Delivery value $6,803,589) 6,800,000
------------
(Cost $6,800,000)
TOTAL INVESTMENT SECURITIES--100.0% $312,670,191
============
(Cost $281,564,974)
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Contracts Settlement Unrealized
to Sell Date Value Gain/(Loss)
- -----------------------------------------------------------------------------
221,951 CHF 6/30/99 $ 145,763 $ 873
4,970,508 EURO 6/30/99 5,189,524 35,464
664,030 GBP 6/30/99 1,063,013 (2,242)
179,058,180 JPY 6/30/99 1,479,086 (1,404)
620,425 SEK 6/30/99 72,207 388
--------------- -------------
$7,949,593 $33,079
=============== =============
(Value on Settlement Date $7,982,672)
Forward foreign currency exchange contracts are used by the portfolio management
team in an effort to protect foreign investments against declines in foreign
currencies. This is also known as hedging. The contracts are called "forward"
because they allow your fund to exchange a foreign currency for U.S. dollars at
a date in the future--and at a price (known as the exchange rate) agreed upon
when the contract is initially entered into.
See Notes to Financial Statements
36 1-800-345-2021
Strategic Moderate--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
NOTES TO SCHEDULE OF INVESTMENTS
ADR = American Depositary Receipt
AUD = Australian Dollar
CAD = Canadian Dollar
CHF = Swiss Franc
DKK = Danish Krone
FHLB = Federal Home Loan Bank
FHLMC = Federal Home Loan Mortgage Corporation
FNMA = Federal National Mortgage Association
GBP = British Pound
GDR = Global Depositary Receipt
GNMA = Government National Mortgage Association
JPY = Japanese Yen
MTN = Medium Term Note
ORD = Foreign Ordinary Share
SEK = Swedish Krona
SLMA = Student Loan Marketing Association
VRN = Variable Rate Note. Interest reset date is indicated and used in
calculating the weighted average portfolio maturity. Rate shown is effective May
31, 1999.
resets = The frequency with which a security's coupon changes, based on current
market conditions or an underlying index. The more frequently a security resets,
the less risk the investor is taking that the coupon will vary significantly
from current market rates.
(1) Non-income producing.
(2) Industry is less than 0.05% of total investment securities.
(3) Final maturity indicated. Expected remaining maturity used for purposes of
calculating the weighted average portfolio maturity.
(4) Security was purchased under Rule 144A or Section 4(2) of the Securities
Act of 1933 or is a private placement and, unless registered under the Act
or exempted from registration, may only be sold to qualified institutional
investors. The aggregate value of restricted securities at May 31, 1999,
was $20,282,572, which represented 6.5% of net assets.
(5) Step-coupon security. Yield to maturity at purchase is indicated. These
securities become interest bearing at a predetermined rate and future date
and are purchased at a substantial discount from their value at maturity.
(6) The rates for commercial paper are the yield to maturity at purchase.
- --------------------------------------------------------------------------------
UNDERSTANDING THE SCHEDULE OF INVESTMENTS--This schedule tells you which
investments your fund owned on the last day of the reporting period.
The schedule includes:
* a list of each investment
* the share amount (stocks) or principal amount (bonds) of each investment
* the market value of each investment
* the percentage of investments in each industry, as applicable
* the percent and dollar breakdown of each investment category
See Notes to Financial Statements
www.americancentury.com 37
Strategic Aggressive--Performance
- --------------------------------------------------------------------------------
TOTAL RETURNS AS OF MAY 31, 1999
<TABLE>
INVESTOR CLASS (INCEPTION 2/15/96) ADVISOR CLASS (INCEPTION 10/2/96)
LEHMAN THREE-MONTH LEHMAN THREE-MONTH
STRATEGIC AGGREGATE U.S. STRATEGIC AGGREGATE U.S.
AGGRESSIVE S&P 500 BOND INDEX TREASURY BILL AGGRESSIVE S&P 500 BOND INDEX TREASURY BILL
===================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6 MONTHS(1) 7.90% 12.59% -0.76% 2.22% 7.81% 12.59% -0.76% 2.22%
1 YEAR 5.32% 21.04% 4.35% 4.62% 4.91% 21.04% 4.35% 4.62%
===================================================================================================================
AVERAGE ANNUAL RETURNS
3 YEARS 12.64% 27.07% 7.83% 4.98% -- -- -- --
LIFE OF FUND 13.01% 25.66% 6.72%(2) 4.99%(2) 12.94% 28.70% 7.56%(3) 4.95%(3)
</TABLE>
(1) Returns for periods less than one year are not annualized.
(2) Since 2/29/96, the date nearest the class's inception for which data are
available.
(3) Since 9/30/96, the date nearest the class's inception for which data are
available.
See pages 69-71 for more information about share classes, returns, and the
comparative indices.
[mountain graph - data below]
GROWTH OF $10,000 OVER LIFE OF FUND
Value on 5/31/99
S&P 500 $21,512
Strategic Aggressive $15,054
Lehman Aggregate $12,352
Three-Month T-Bill $11,713
S&P 500 Strategic Lehman Three-Month
Index Aggressive Aggregate T-Bill
2/29/96 $10,000 $10,000 $10,000 $10,000
3/31/96 $10,096 $10,101 $9,930 $10,041
4/30/96 $10,244 $10,423 $9,874 $10,082
5/31/96 $10,508 $10,544 $9,855 $10,125
6/30/96 $10,548 $10,524 $9,987 $10,167
7/31/96 $10,081 $10,081 $10,014 $10,211
8/31/96 $10,294 $10,323 $9,997 $10,254
9/30/96 $10,873 $10,767 $10,171 $10,297
10/31/96 $11,173 $10,848 $10,396 $10,339
11/30/96 $12,016 $11,150 $10,574 $10,382
12/31/96 $11,778 $11,069 $10,476 $10,425
1/31/97 $12,513 $11,353 $10,508 $10,469
2/28/97 $12,612 $11,191 $10,535 $10,513
3/31/97 $12,095 $10,805 $10,418 $10,558
4/30/97 $12,816 $11,008 $10,574 $10,603
5/31/97 $13,599 $11,658 $10,674 $10,648
6/30/97 $14,204 $12,063 $10,801 $10,691
7/31/97 $15,333 $12,774 $11,093 $10,736
8/31/97 $14,475 $12,408 $10,999 $10,783
9/30/97 $15,267 $13,078 $11,160 $10,827
10/31/97 $14,757 $12,571 $11,322 $10,871
11/30/97 $15,440 $12,693 $11,374 $10,919
12/31/97 $15,705 $12,866 $11,489 $10,966
1/31/98 $15,878 $12,908 $11,636 $11,012
2/28/98 $17,023 $13,698 $11,627 $11,058
3/31/98 $17,895 $14,295 $11,666 $11,105
4/30/98 $18,077 $14,444 $11,727 $11,150
5/31/98 $17,766 $14,295 $11,839 $11,197
6/30/98 $18,487 $14,615 $11,939 $11,243
7/31/98 $18,291 $14,466 $11,964 $11,289
8/31/98 $15,648 $12,696 $12,159 $11,335
9/30/98 $16,651 $12,994 $12,444 $11,378
10/31/98 $18,004 $13,420 $12,378 $11,416
11/30/98 $19,095 $13,953 $12,448 $11,458
12/31/98 $20,194 $14,639 $12,486 $11,501
1/31/99 $21,039 $14,906 $12,574 $11,542
2/28/99 $20,384 $14,286 $12,354 $11,585
3/31/99 $21,200 $14,744 $12,422 $11,628
4/30/99 $22,020 $15,277 $12,462 $11,669
5/31/99 $21,512 $15,054 $12,352 $11,713
$10,000 investment made 2/29/96
The graph at left shows the growth of a $10,000 investment over the life of the
fund, while the graph below shows the fund's year-by-year performance. The S&P
500, Lehman Aggregate Bond, and Three-Month U.S. Treasury Bill (T-Bill) indices
are provided for comparison in each graph. Strategic Aggressive's total returns
include operating expenses (such as transaction costs and management fees) that
reduce returns, while the total returns of the indices do not. The graphs are
based on Investor Class shares only; performance for other classes will vary due
to differences in fee structures (see the Total Returns table above). Past
performance does not guarantee future results. Investment return and principal
value will fluctuate, and redemption value may be more or less than original
cost.
[bar graph - data below]
ONE-YEAR RETURNS OVER LIFE OF FUND (PERIODS ENDING MAY 31)
Strategic Lehman Three-Month
Aggressive S&P 500 Aggregate T-Bill
DATE RETURN RETURN RETURN RETURN
5/96* 5.44% 5.04% -1.45% 1.25%
5/97 10.55% 29.48% 8.32% 5.17%
5/98 22.62% 30.68% 10.91% 5.16%
5/99 5.32% 21.04% 4.35% 4.62%
* From 2/29/96 (the date nearest the class's inception for which index data are
available) to 5/31/96.
38 1-800-345-2021
Strategic Aggressive--Q&A
- --------------------------------------------------------------------------------
An interview with Jeff Tyler and Brian Howell, portfolio managers on the
Strategic Asset Allocation funds management team.
HOW DID STRATEGIC AGGRESSIVE PERFORM DURING THE SIX MONTHS ENDED MAY 31, 1999?
Strategic Aggressive returned 7.90% for the six-month period (see the
previous page for additional performance information).* That return reflects the
blended performance of the fund's stock, bond, and cash portfolios. Strategic
Aggressive's stock holdings helped the fund produce healthy returns despite
relatively poor performance by bonds (see pages 3 and 4 for a detailed
discussion of world stock and bond markets for the last six months).
HOW IS STRATEGIC AGGRESSIVE MANAGED RELATIVE TO ITS BENCHMARK?
We manage Strategic Aggressive to give shareholders long-term capital
growth in a well-diversified portfolio of stocks, bonds, and cash. To do that,
we generally allocate 75% of the fund's investments to stocks, 20% to bonds, and
5% to money market securities.
These weightings represent the portfolio's neutral position. We make modest
adjustments around these percentages to try and enhance performance.
HOW DID YOU POSITION THE FUND RELATIVE TO ITS NEUTRAL ASSET MIX OVER THE LAST
SIX MONTHS?
We ran the portfolio close to neutral, with only a very modest overweight
in stocks. Within equities, we added more mid-sized and value shares in the last
six months, putting less emphasis on bigger, higher-priced growth stocks.
CAN YOU ELABORATE ON YOUR DECISION TO OVERWEIGHT VALUE STOCKS?
Sure, but first let's take a step back. The last few years, investors
focused on a handful of very large, fast-growing companies--typically
traditional technology stocks, but also including some Internet shares. In
effect, these stocks became highly leveraged plays on the U.S. economy--the
better the economy, the faster the earnings for these companies were expected to
grow, and the higher their stock price.
But rising interest rates over the last several months threatened those
lofty growth assumptions, calling into question the extremely high valuations
awarded many large-company growth stocks. As a result, we felt value shares had
a better risk/return outlook than the largest growth stocks.
DID THE PORTFOLIO BENEFIT FROM ITS EMPHASIS ON VALUE STOCKS?
Yes, though we might have been a little early on that trade--many of these
stocks generally underperformed large-cap growth shares until April and May.
That's when interest rates shot higher, plus Compaq Computer, a leading
high-tech firm, said profits would be much lower than expected. Many investors
took money out of high-priced growth stocks and put it to work in undervalued
sectors of the market. In general, that money went from growth to value and down
the capitalization ladder from large- to mid-cap stocks. As a result, value
outperformed growth and mid- beat large-cap for the six months (see page 3).
* All fund returns referenced in this interview are for Investor Class shares.
[right margin]
"WE FELT VALUE SHARES HAD A BETTER RISK/RETURN OUTLOOK THAN THE LARGEST GROWTH
STOCKS."
[pie chart - data below]
ASSET ALLOCATION
(AS OF MAY 31, 1999)
PERCENT OF FUND INVESTMENTS
U.S. Stocks 59%
U.S. Bonds 13%
Foreign Stocks 18%
Foreign Bonds 5%
Money Market
Securities 5%
See page 70 for the fund's neutral asset mix.
Investment terms are defined in the Glossary on pages 71-72.
www.americancentury.com 39
Strategic Aggressive--Q&A
- --------------------------------------------------------------------------------
(Continued)
WHAT CHANGES DID YOU MAKE TO THE BOND PORTION OF THE PORTFOLIO?
We made only very modest adjustments, adding some higher-yielding corporate
bonds. One way to measure the relative attractiveness of corporate bonds is to
look at the spread, or difference in yield, between corporates and Treasurys.
The wider the yield spread, the more attractive corporate bonds become. In late
1998, the spread between corporates and Treasurys reached its widest level since
the recession of 1990. With the economy and corporate profits generally healthy,
we simply felt these values were too good to pass up.
DID YOU EMPHASIZE A PARTICULAR SECTOR OF THE CORPORATE BOND MARKET?
In general, we liked bonds issued by cyclical companies. Cyclical companies
are closely tied to the health of the economy, so their bonds tend to perform
best when the economy is strong. When fears of recession crippled the market in
the third quarter of 1998, these bonds were severely punished and experienced
sharp price declines. We used that opportunity to buy some of these securities
at attractive prices. As economic growth improved and investors once again
became interested in these bonds, cyclicals performed relatively well.
WHAT'S YOUR OUTLOOK FOR THE GLOBAL ECONOMY?
We have a generally positive outlook. Analysts expect global growth to come
in at 2.5-3.0% this year, compared with only about 1.5% in 1998. Also in
contrast to 1998, many think the U.S. will lag the rest of the world in 1999.
Better economic growth would lead you to expect higher stock prices. Because
world economies are so closely linked, more business overseas should also
benefit companies here at home.
ARE THERE ANY POTENTIAL RISKS TO THIS OUTLOOK?
Two issues we're watching carefully are inflation and the potential year
2000 (Y2K) computer problem. While it's impossible to predict the economic
impact of the Y2K problem, we are taking steps to measure the Y2K-readiness of
the issuers of the fund's portfolio securities. We'll also be keeping a close
eye on the financial markets as we get closer to year-end.
AND WHAT ABOUT THE RISK OF INFLATION?
A big reason the inflation rate fell to its lowest level in a dozen years
in 1998 was the weakness of the global economy. With growth rebounding this
year, inflation has begun to pick up, though it remains modest by historical
standards.
[left margin]
FUND'S U.S. STOCKS (AS OF MAY 31, 1999)
NUMBER OF COMPANIES 355
DIVIDEND YIELD 1.14%
PRICE/EARNINGS RATIO 25.8
% OF FUND'S % OF
U.S. STOCKS FUND
TOP 5 U.S. STOCKS
MICROSOFT CORP. 2.5% 1.5%
WAL-MART STORES, INC. 1.5% 0.9%
GENERAL ELECTRIC CO. (U.S.) 1.5% 0.9%
TYCO INTERNATIONAL LTD. 1.4% 0.8%
AIRTOUCH COMMUNICATIONS, INC. 1.3% 0.8%
FUND'S FOREIGN STOCKS (AS OF MAY 31, 1999)
NUMBER OF COMPANIES 283
DIVIDEND YIELD 1.18%
% OF FUND'S % OF
COUNTRY FOREIGN STOCKS FUND
TOP 5 FOREIGN STOCKS
MANNESMANN AG GERMANY 2.1% 0.4%
MARSCHOLLEK,
LAUTENSCHLAEGER
UND PARTNER UND GERMANY 1.5% 0.3%
TELEFONICA S.A. SPAIN 1.3% 0.2%
BRITISH TELECOM-
MUNICATIONS PLC U.K. 1.2% 0.2%
VODAFONE GROUP PLC U.K. 1.1% 0.2%
[pie chart - data below]
PERCENT OF FUND'S FOREIGN STOCKS
Europe 68%
Asia/Pacific 22%
Americas
(excluding U.S.) 10%
40 1-800-345-2021
Strategic Aggressive--Q&A
- --------------------------------------------------------------------------------
(Continued)
That brings us to the other reason inflation has declined throughout the
1990s--increased worker productivity. More productive workers explain why both
wages and corporate profits rose while inflation fell. However, it's uncertain
if productivity gains can continue at the same pace they have in the past.
Federal Reserve Chairman Alan Greenspan said as much when announcing his
intention to raise short-term interest rates to head off more serious inflation
down the road. But it seems that a vigilant Fed and the ability of the global
economy to produce more goods than there's currently demand for will keep
inflation from getting out of hand anytime soon.
WHAT'S YOUR OUTLOOK FOR INTEREST RATES?
We've already seen a big increase in interest rates since the beginning of
the year, so we don't expect rates to go much higher. Instead, we think it's
more likely bond yields will trade in a relatively narrow range. Of course, that
assumes inflation doesn't increase dramatically and that the world economy
gradually improves.
GIVEN THIS OUTLOOK, HOW WILL YOU POSITION STRATEGIC AGGRESSIVE'S STOCK
PORTFOLIO?
If we're right and we get good growth and modest inflation, stocks could do
well. Value shares continue to look like good buys, so our biggest bet in U.S.
equities is likely to be in that area. And with economic growth overseas
expected to be even stronger than here at home, foreign stocks look very
attractive. As a result, we may overweight foreign stocks relative to foreign
bonds going forward.
AND HOW DO YOU EXPECT TO POSITION THE FUND'S BONDS?
Strong growth and relatively stable rates make a very appealing environment
for corporate bonds. However, the outlook is somewhat clouded by Y2K. We think
the prudent thing to do is keep an eye on this situation and do our best to
position the portfolio to respond to the investment challenges and opportunities
Y2K might present.
[right margin]
"ANALYSTS EXPECT GLOBAL GROWTH TO COME IN AT 2.5-3.0% THIS YEAR, COMPARED WITH
ONLY ABOUT 1.5% IN 1998. BETTER ECONOMIC GROWTH WOULD LEAD YOU TO EXPECT HIGHER
STOCK PRICES."
FUND'S U.S. BONDS (AS OF MAY 31, 1999)
NUMBER OF SECURITIES 90
WEIGHTED AVERAGE MATURITY 7.9 YEARS
AVERAGE DURATION 4.8 YEARS
[pie chart - data below]
PERCENT OF FUND'S U.S. BONDS
Corporate 56%
Mortgage-Backed 15%
U.S. Treasury 14%
Asset-Backed 8%
U.S. Govt. Agency 6%
Other 1%
FUND'S FOREIGN BONDS (AS OF MAY 31, 1999)
NUMBER OF SECURITIES 14
WEIGHTED AVERAGE MATURITY 9.0 YEARS
AVERAGE DURATION 6.1 YEARS
[pie chart - data below]
PERCENT OF FUND'S FOREIGN BONDS
Europe 56%
Asia/Pacific 17%
Americas
(excluding U.S.) 27%
www.americancentury.com 41
Strategic Aggressive--Schedule of Investments
- --------------------------------------------------------------------------------
MAY 31, 1999 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS & RIGHTS--75.9%
AEROSPACE & DEFENSE--1.7%
1,300 Alliant Techsystems Inc.(1) $ 110,500
3,100 Aviation Sales Co.(1) 119,350
1,900 Avondale Industries, Inc.(1) 69,350
8,500 Boeing Co. 359,125
7,500 Bombardier Inc. Cl B ORD 116,516
3,500 Cobham PLC ORD 51,844
3,400 Cordant Technologies Inc. 164,900
1,900 EG&G, Inc. 56,406
1,700 General Dynamics Corp. 111,775
6,800 Goodrich (B.F.) Company (The) 275,400
8,400 Lockheed Martin Corp. 339,675
2,000 Newport News Shipbuilding Inc. 55,000
4,300 Raytheon Co. Cl B 292,669
11,700 United Technologies Corp. 726,131
------------
2,848,641
------------
AIRLINES(2)
500 AMR Corp.(1) 32,531
400 Delta Air Lines Inc. 22,950
------------
55,481
------------
AUTOMOBILES & AUTO PARTS--1.3%
4,300 Coachmen Industries, Inc. 94,600
10,500 Cooper Tire and Rubber Company 249,375
1,585 DaimlerChrysler AG ORD 136,687
838 Delphi Automotive Systems Corp.(1) 16,446
11,500 Ford Motor Co. 656,219
27,000 Fuji Heavy Industries Ltd. ORD 175,534
1,200 General Motors Corp. 82,800
2,100 Johnson Controls, Inc. 132,431
4,100 National R.V. Holdings, Inc.(1) 105,319
50 Porsche AG ORD 113,855
16,900 Superior Industries International, Inc. 421,444
------------
2,184,710
------------
BANKING--7.1%
44,799 Anglo Irish Bank Corp. plc ORD 123,032
6,600 Argentaria SA ORD 147,812
10,900 Australia & New Zealand Banking
Group Ltd. ORD 79,065
6,888 Banc One Corp. 389,602
5,860 Banca Popolare Commercio e
Industria ORD 133,438
3,677 Banca Popolare di Brescia ORD 145,041
2,000 Banca Popolare di Lodi ORD 21,781
5,959 Banco Mello, S.A. ORD 54,960
9,672 Bank of Ireland ORD 179,122
40 Bank Sarasin & Cie Cl B ORD 67,568
15,201 BankAmerica Corp. 983,315
Shares Value
- --------------------------------------------------------------------------------
5,200 Barclays PLC ORD $ 157,630
17,000 Chase Manhattan Corp. 1,232,500
10,200 Citigroup Inc. 675,750
19,500 Dao Heng Bank Group Ltd. ORD 75,689
2,800 Deutsche Pfandbrief-und
Hypothekenbank AG ORD 242,196
17,850 Equitable Banking Corp. ORD(1) 44,801
6,800 Fifth Third Bancorp 463,888
11,900 First Union Corp. 548,144
19,900 First Virginia Banks, Inc. 988,781
3,200 Housing & Commercial Bank,
Korea ORD(1) 87,701
1,600 HSBC Holdings plc ORD 52,407
51,000 Keppel Bank ORD 111,757
16,300 KeyCorp 566,425
3,900 Kookmin Bank ORD 59,034
10,400 Mellon Bank Corp. 371,150
712 National Bank of Greece S.A.
ORD 49,655
6,200 National Westminster Bank PLC
ORD 142,174
3,700 Northern Trust Corp. 334,850
1,400 Piraeus Bank S.A. ORD 41,075
4,900 PNC Bank Corp. 280,525
9,000 Regions Financial Corp. 341,156
2,700 Shinhan Bank GDR(1) 51,368
1,400 Societe Generale Cl A ORD 254,160
18,100 Standard Chartered plc ORD 273,758
8,000 Sumitomo Bank, Ltd. (The) ORD 96,317
20,000 Summit Bancorp. 818,750
1,400 Toronto-Dominion Bank
(The) ORD 73,892
945 UBS AG ORD 273,474
3,100 Unibanco-Uniao de Bancos
Brasileiros S.A. GDR(1) 69,944
428 Van der Moolen Holding
N.V. ORD 27,833
5,700 Wachovia Corp. 503,025
5,700 Wells Fargo & Co. 228,000
8,000 Wing Hang Bank Ltd. ORD 22,593
5,100 Zions Bancorporation 325,125
------------
12,210,263
------------
BIOTECHNOLOGY--1.0%
5,100 Amgen Inc.(1) 322,734
4,700 Biogen, Inc.(1) 512,594
6,200 Duramed Pharmaceuticals, Inc.(1) 91,062
1,500 IDEC Pharmaceuticals Corp.(1) 75,609
2,600 MedImmune, Inc.(1) 165,262
5,100 Pharmaceutical Product
Development, Inc.(1) 135,469
5,900 Protein Design Labs, Inc.(1) 115,419
900 QIAGEN N.V. New York Shares(1) 63,506
See Notes to Financial Statements
42 1-800-345-2021
Strategic Aggressive--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
2,600 QLT PhotoTherapeutics, Inc. ORD (1) $ 114,386
2,900 Ventana Medical Systems, Inc.(1) 57,909
------------
1,653,950
------------
BROADCASTING & MEDIA--3.0%
7,900 BEC World Public Co., Limited
ORD 42,565
2,300 Capital Radio plc ORD 32,301
16,200 CBS Corporation(1) 676,350
12,000 Clear Channel Communications,
Inc.(1) 792,750
1,100 Cogeco Cable, Inc. ORD 22,611
3,100 EchoStar Communications Corp.
Cl A(1) 354,950
16,800 Fox Entertainment Group, Inc.
Cl A(1) 428,400
4,500 Grupo Televisa S.A. GDR(1) 188,156
1,115 Havas Advertising SA ORD 217,874
10,800 Infinity Broadcasting Corp. Cl A(1) 276,075
9,200 Mediaset SpA ORD 74,497
3,500 Modern Times Group
MTG AB Cl B ORD(1) 76,878
200 NRJ SA ORD 42,728
3,600 NTL Inc.(1) 339,975
1,300 PrimaCom AG ORD(1) 52,837
3,000 RCN Corp.(1) 124,125
5,800 Rogers Communications, Inc.
Cl B ORD(1) 119,616
700 Societe Television
Francaise 1 ORD 167,786
1,300 Telewest Communications
plc ADR(1) 56,062
45,700 TeleWest Communications
plc ORD(1) 196,310
8,500 United International Holdings,
Inc. Cl A(1) 608,812
2,600 United Pan-Europe
Communications NV ORD(1) 159,188
1,500 Westwood One, Inc.(1) 52,125
------------
5,102,971
------------
BUILDING & HOME IMPROVEMENTS--0.2%
1,400 Centex Construction Products Inc. 50,225
3,600 Elcor Corp. 145,350
3,200 York International Corporation 135,000
------------
330,575
------------
BUSINESS SERVICES & SUPPLIES--1.6%
4,300 Acxiom Corp.(1) 116,503
850 Altran Technologies SA ORD 192,313
4,400 Athlon Groep N.V. ORD 111,885
8,300 Capita Group Plc ORD 82,073
12,000 CGI Group, Inc. ORD(1) 260,914
6,600 CSG Systems International, Inc.(1) 214,912
Shares Value
- --------------------------------------------------------------------------------
800 DIS Deutscher Industrie Service
AG ORD $ 40,019
3,890 Korea Telecom Corporation ORD(1) 221,781
1,700 MAXIMUS, Inc.(1) 50,575
2,800 Metzler Group, Inc. (The)(1) 92,138
2,800 NCO Group, Inc.(1) 85,838
10 NTT Data Corp. ORD 66,165
4,575 Parity plc ORD 44,287
3,200 Professional Detailing, Inc.(1) 85,000
200 PubliGroupe S.A. ORD 121,780
4,000 Quanta Services, Inc.(1) 135,750
6,700 Quintiles Transnational Corp.(1) 271,769
3,300 Securitas AB Cl B ORD 46,981
113,000 Singapore Technologies
Engineering Ltd. ORD 123,154
600 Sixt AG ORD 44,083
1,000 Toyo Information Systems Co.,
Ltd. ORD 27,075
1,600 Triad Group PLC ORD 11,017
2,424 Unique International NV ORD 55,323
600 VA Technologie AG ORD 50,336
1,800 Valassis Communications, Inc.(1) 62,662
18,900 WPP Group plc ORD 152,538
------------
2,766,871
------------
CHEMICALS & RESINS--0.7%
3,200 Air Products and Chemicals, Inc. 131,200
1,100 Compagnie Francaise d'Etudes et
de Construction Technip ORD 119,222
3,200 Dow Chemical Co. 388,800
2,500 du Pont (E.I.) de Nemours & Co. 163,594
9,200 IMC Global Inc. 192,625
10,000 Lubrizol Corp. 275,000
------------
1,270,441
------------
COMMUNICATIONS EQUIPMENT--2.6%
8,700 Andrew Corp.(1) 134,578
16,200 ANTEC Corp.(1) 474,356
7,700 C-COR Electronics, Inc.(1) 183,597
5,400 CIENA Corp.(1) 155,081
6,100 CommScope, Inc.(1) 160,125
3,300 Comverse Technology, Inc.(1) 222,853
4,100 FORE Systems, Inc.(1) 140,809
1,100 Gilat Satellite Networks Ltd.(1) 58,162
5,500 Harmonic Lightwaves, Inc.(1) 271,219
3,600 Harris Corp. 136,125
622 International Contract
Manufacturing Limited ORD(1) 544
3,000 JDS Fitel Inc. ORD(1) 203,317
16,500 Lucent Technologies Inc. 938,438
1,700 Motorola, Inc. 140,781
9,100 Newbridge Networks Corp.(1) 251,388
2,700 Nortel Networks Corp. 202,500
4,900 Polycom, Inc.(1) 125,256
See Notes to Financial Statements
www.americancentury.com 43
Strategic Aggressive--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
4,000 Powerwave Technologies, Inc.(1) $ 92,250
5,600 QUALCOMM Inc.(1) 544,425
4,100 Tandberg ASA ORD(1) 54,970
1,800 Terayon Communication
Systems, Inc.(1) 57,938
------------
4,548,712
------------
COMPUTER PERIPHERALS--1.4%
12,000 Cisco Systems Inc.(1) 1,307,625
7,500 EMC Corp. (Mass.)(1) 747,188
500 Lexmark International Group,
Inc. Cl A(1) 68,062
6,400 Psion plc ORD 79,939
8,500 Seagate Technology, Inc.(1) 256,594
------------
2,459,408
------------
COMPUTER SOFTWARE & SERVICES--5.5%
3,500 Advantage Learning Systems, Inc.(1) 77,438
5,300 Amdocs Ltd.(1) 121,569
9,600 America Online Inc. 1,146,000
1,500 American Management
System, Inc.(1) 47,672
4,900 At Home Corp. Series A(1) 620,922
1,700 Baltimore Technologies plc ORD(1) 23,616
1,200 BroadVision, Inc.(1) 62,362
11,100 Cadence Design Systems, Inc.(1) 142,912
1,458 Cap Gemini SA ORD 209,837
3,600 Computershare Limited ORD(1) 32,885
2,200 Compuware Corp.(1) 68,269
1,309 Delta Informatics S.A. ORD 60,860
1,400 Eidos plc ORD(1) 46,631
2,600 Equant NV New York Shares(1) 215,638
200 Excalibur Technologies Corp.(1) 2,825
5,947 Fibernet Group plc ORD(1) 44,426
10,200 First Data Corp. 458,362
1,300 FortuneCity.com, Inc. ORD(1) 23,980
1,700 Fundtech Ltd.(1) 54,931
2,100 Getronics N.V. ORD 80,975
5,500 GTECH Holdings Corp.(1) 135,781
2,500 IBS AB ORD(1) 48,812
2,290 Icon Medialab International
AB ORD(1) 85,165
5,200 International Integration Inc.(1) 98,962
1,000 Intraware, Inc.(1) 22,000
1,800 Keane, Inc.(1) 52,200
36,800 LibertyOne Limited ORD(1) 20,642
8,200 Logica plc ORD 76,029
2,025 London Bridge Software Holdings
plc ORD 53,181
10,048 Mandator AB ORD 68,898
800 Meitec ORD 24,491
16,100 Mentor Graphics Corp.(1) 202,759
31,700 Microsoft Corp.(1) 2,558,784
Shares Value
- --------------------------------------------------------------------------------
3,300 National Instruments Corp.(1) $ 125,297
2,600 NCR Corp.(1) 101,562
10,900 Novell, Inc.(1) 255,809
4,500 Open Text Corp.(1) 135,984
1,600 Oracle Corp.(1) 39,650
2,871 Ordina N.V. ORD(1) 72,706
5,000 Proxicom, Inc.(1) 104,062
1,800 QRS Corp.(1) 133,650
3,200 Sage Group plc (The) ORD 110,557
700 Sapient Corp.(1) 44,647
1,612 Sigma AB Cl B ORD 12,552
3,500 Sterling Software, Inc.(1) 85,094
1,000 Sumisho Computer Systems
Corp. ORD 33,412
2,900 Tieto Corp. Cl B ORD 101,245
23,100 Unisys Corp.(1) 876,356
944 Unit 4 ORD(1) 19,233
5,700 USWeb Corp.(1) 144,816
900 Veritas Software Corp.(1) 79,397
------------
9,465,843
------------
COMPUTER SYSTEMS--1.5%
9,600 Apple Computer, Inc.(1) 422,700
8,600 Compaq Computer Corp. 203,712
5,200 Dell Computer Corp.(1) 178,912
16,000 Fujitsu Ltd. ORD 265,975
1,000 Gateway 2000, Inc.(1) 60,812
5,200 Hewlett-Packard Co. 490,425
7,600 International Business Machines
Corp. 883,975
------------
2,506,511
------------
CONSTRUCTION & PROPERTY
DEVELOPMENT--0.3%
2,000 Centex Corp. 74,125
4,900 CRH plc ORD 83,645
2,900 D.R. Horton, Inc. 49,300
1,200 Dycom Industries, Inc.(1) 57,900
7,800 Insituform Technologies,
Inc. Cl A(1) 129,919
2,400 Lafarge Corp. 80,250
2,500 Pulte Corp. 59,531
------------
534,670
------------
CONSUMER PRODUCTS--1.2%
1,900 Avon Products, Inc. 93,931
2,300 Chattem, Inc.(1) 83,662
100 Clarins ORD 8,598
1,100 Clorox Co. (The) 111,031
380 Fancl Corp. ORD 44,719
5,200 Helen of Troy Ltd.(1) 82,388
12,000 Kao Corporation ORD 327,861
6,400 Procter & Gamble Co. (The) 597,600
17,000 Shiseido Co., Ltd. ORD 250,422
See Notes to Financial Statements
44 1-800-345-2021
Strategic Aggressive--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
900 Tomy Company, Ltd. ORD $ 60,141
5,700 Whirlpool Corp. 367,650
1,000 World Co., Ltd. ORD 60,322
------------
2,088,325
------------
CONTROL & MEASUREMENT(2)
800 Orbotech Ltd.(1) 34,400
------------
DIVERSIFIED COMPANIES--2.8%
18,000 BBA Group plc ORD 127,115
3,775 Bodycote International plc ORD 50,779
4,500 Brambles Industries Limited ORD 119,959
4,100 DCC plc ORD 33,328
14,900 General Electric Co. (U.S.) 1,515,144
22,000 Keppel Telecommunications &
Transportation Ltd. ORD(1) 30,099
9,500 Minnesota Mining &
Manufacturing Co. 814,625
17,500 Swire Pacific Ltd. Cl A ORD 83,497
16,200 Tyco International Ltd. 1,415,475
1,607 Unilever N.V. New York Shares 104,957
5,890 Vivendi ORD 435,817
19,000 Wharf (Holdings) Ltd. ORD 48,390
17,000 Wing Tai Holdings Ltd. ORD 19,119
------------
4,798,304
------------
EDUCATION(2)
600 Benesse Corporation ORD 51,648
------------
ELECTRICAL & ELECTRONIC
COMPONENTS--4.9%
5,600 Advanced Energy Industries, Inc.(1) 138,950
7,400 Aeroflex Inc.(1) 107,762
7,200 Arrow Electronics, Inc.(1) 125,100
4,600 ASM Lithography Holding N.V.
New York Shares(1) 202,688
11,400 Avnet, Inc. 496,612
900 Broadcom Corp. Cl A(1) 86,119
3,500 Celestica Inc.(1) 138,688
5,900 Conexant Systems, Inc.(1) 228,072
49,000 Datacraft Asia Limited ORD 174,440
5,900 DII Group, Inc.(1) 193,409
1,100 Hi/fn, Inc.(1) 63,628
22,900 Intel Corp. 1,240,894
2,600 KLA-Tencor Corporation(1) 118,381
15 Kudelski SA ORD 56,470
400 Linear Technology Corp. 21,188
3,300 Micron Technology, Inc.(1) 125,194
18,000 Natsteel Electronics Ltd. ORD 60,000
2,000 Optical Coating Laboratory, Inc. 129,875
1,600 Philips Electronics N.V.
New York Shares(1) 137,600
8,600 Pinnacle Systems, Inc.(1) 442,362
1,600 PMC-Sierra, Inc.(1) 77,650
Shares Value
- --------------------------------------------------------------------------------
1,600 Qlogic Corp.(1) $ 175,800
900 Rockwell International Corp. 49,669
1,271 Samsung Electronics ORD 88,424
117 Samsung Electronics
Rights ORD(1) 1,332
3,100 Sanmina Corp.(1) 232,597
4,000 Sawtek Inc.(1) 159,000
1,500 SGL CARBON Aktiengesellschaft
ORD(1) 104,736
1,700 Siemens AG ORD 114,272
1,424 Softbank S.A. GDR 45,924
7,000 Solectron Corp.(1) 383,250
3,700 Sony Corp. ORD 345,900
5,100 Teradyne, Inc.(1) 269,344
6,800 Texas Instruments Inc. 743,750
3,200 Thomas & Betts Corp. 137,000
5,000 Tokyo Electron Ltd. ORD 274,452
4,800 Uniphase Corp.(1) 644,850
5,900 Unitrode Corp.(1) 122,794
6,900 Vishay Intertechnology, Inc. 143,606
3,000 Xilinx, Inc. 133,219
------------
8,535,001
------------
ENERGY (PRODUCTION & MARKETING)--2.7%
2,400 Anadarko Petroleum Corp. 90,000
9,700 Apache Corp. 349,200
8,200 Atlantic Richfield Co. 686,238
1,986 BP Amoco Plc ADR 212,750
14,200 Burlington Resources Inc. 609,712
2,300 Chevron Corp. 213,181
1,300 Elf Aquitaine SA ORD 188,046
10,500 Exxon Corp. 838,688
3,900 Mobil Corp. 394,875
8,800 Murphy Oil Corp. 431,750
6,300 Royal Dutch Petroleum Co.
New York Shares 356,344
1,400 Texaco Inc. 91,700
5,700 Union Pacific Resources 79,444
3,400 Unocal Corp. 135,150
------------
4,677,078
------------
ENERGY (SERVICES)--0.4%
11,400 Baker Hughes Inc. 354,825
610 Daehan City Gas Co. ORD(1) 18,621
1,300 IHC Caland N.V. ORD 51,144
3,900 Reliant Energy, Inc. 118,950
1,300 Schlumberger Ltd. 78,244
960 Seoul City Gas Co., Ltd. ORD(1) 31,491
3,200 Tidewater Inc. 81,800
------------
735,075
------------
ENVIRONMENTAL SERVICES--0.1%
2,712 Waste Management, Inc. 143,397
------------
See Notes to Financial Statements
www.americancentury.com 45
Strategic Aggressive--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
FINANCIAL SERVICES--3.4%
23,000 Amvescap Plc ORD $ 209,937
13,800 Banca Intesa S.p.A. ORD 70,183
5,300 Capital One Financial Corp. 798,644
7,100 CIT Group, Inc. (The) Cl A 205,900
2,700 Close Brothers Group plc ORD 29,725
1,200 Credit Suisse Group ORD 208,204
6,300 Fannie Mae 428,400
3,300 Federal Home Loan Mortgage
Corporation 192,431
3,500 Franklin Resources, Inc. 152,250
497 GFI Informatique ORD(1) 60,600
33,000 Grupo Financiero Banorte
S.A. de C.V. Cl O ORD(1) 42,006
4,798 ING Groep N.V. ORD 256,262
100 Julius Baer Holding AG ORD 302,485
3,139 Kempen & Company NV ORD 168,145
11,900 Lloyds TSB Group plc ORD 157,213
8,100 Man (E D & F) Group plc ORD 42,220
2,000 Merrill Lynch & Co., Inc. 168,000
5,400 Morgan Stanley Dean Witter,
Discover & Co. 521,100
58,200 National Finance and Securities
Public Co., Ltd. Cl F ORD(1) 33,710
3,670 Provident Financial plc ORD 54,421
7,200 Providian Financial Corp. 690,750
4,500 Schwab (Charles) Corp. 476,156
200 Shohkoh Fund & Co., Ltd. ORD 111,262
17,300 Skandia Forsakrings AB ORD 296,560
100 Vontobel Holding AG Cl B ORD 163,682
------------
5,840,246
------------
FOOD & BEVERAGE-2.8%
3,300 American Italian Pasta Co. Cl A(1) 90,750
51,535 Archer-Daniels-Midland Co. 773,025
2,700 Coca-Cola Company (The) 184,444
14,700 Coca-Cola Enterprises, Inc. 532,875
6,000 Diageo plc ORD 63,077
2,500 Earthgrains Company 58,594
600 Groupe Danone ORD 165,077
2,900 Heineken NV ORD 161,085
1,300 Hormel Foods Corp. 51,512
5,000 IBP, Inc. 107,188
31,600 Interstate Bakeries Corp. 691,250
30,100 J.D. Wetherspoon plc ORD 150,627
1,000 Keebler Foods Co.(1) 33,500
9,000 Kirin Brewery Company, Ltd. ORD 102,876
99 Nestle S.A. ORD 177,926
400 Nong Shim Company
Limited ORD(1) 23,106
2,900 Panamerican Beverages Inc. Cl A 67,244
5,800 PepsiCo, Inc. 207,712
4,500 Quaker Oats Co. (The) 297,281
Shares Value
- --------------------------------------------------------------------------------
32,700 San Miguel Corporation Cl B ORD $ 73,478
1,400 Seagram Co. Ltd. (The) 72,712
4,400 Suiza Foods Corp.(1) 161,150
21,700 Tyson Foods, Inc. Cl A 499,100
------------
4,745,589
------------
FURNITURE & FURNISHINGS(2)
2,994 Dorel Industries Inc. Cl B ORD(1) 67,028
------------
HEALTHCARE--1.4%
8,600 Aetna Inc. 780,988
6,900 Apria Healthcare Group Inc.(1) 142,312
6,900 Beckman Coulter Inc. 350,175
28,700 Columbia/HCA Healthcare Corp. 676,244
5,000 Eisai Company, Ltd. ORD 92,787
6,300 Hooper Holmes, Inc. 114,188
1,500 PacifiCare Health Systems,
Inc. Cl B(1) 129,516
1,900 TLC The Laser Center Inc.(1) 83,362
------------
2,369,572
------------
INDUSTRIAL--0.1%
35,800 Invensys plc ORD 163,099
------------
INDUSTRIAL EQUIPMENT
& MACHINERY--0.5%
4,700 Ashtead Group plc ORD 11,967
3,900 Ingersoll-Rand Co. 248,381
4,780 Mannesmann AG ORD 652,573
------------
912,921
------------
INSURANCE--2.4%
311 Allianz AG ORD 84,916
7,000 Allstate Corp. 255,062
4,400 American International Group, Inc. 502,975
2,057 ASR Verzekeringsgroep N.V. ORD 141,592
4,200 Assicurazioni Generali ORD 149,257
2,300 Axa-UAP ORD 264,862
1,900 Blanch (E.W.) Holdings, Inc. 121,600
8,600 Chubb Corp. (The) 602,538
12,400 CNA Financial Corp.(1) 538,625
3,800 Companhia de Seguros Mundial
Confianca, SA ORD(1) 109,221
1,570 Ethniki General Insurance
Co. ORD(1) 95,145
4,900 Fidelity National Financial, Inc. 82,994
5,500 First American Financial Corp.
(The) 90,406
3,460 Fortis AG ORD 110,880
2,300 Gallagher (Arthur J.) & Co. 111,981
1,900 LandAmerica Financial Group, Inc. 54,506
4,800 Lincoln National Corp. 488,400
2,100 Loews Corp. 170,756
19,900 Mediolanum SpA ORD 135,424
See Notes to Financial Statements
46 1-800-345-2021
Strategic Aggressive--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
500 Pohjola Group Insurance Corp.
Cl B ORD $ 22,927
62,240 Premafin Finanziaria S.p.A. ORD(1) 39,437
1,200 Sampo Insurance Co. plc
Cl A ORD 36,267
------------
4,209,771
------------
LEISURE--0.8%
455 Accor SA ORD 111,527
1,000 Anchor Gaming(1) 44,844
8,700 Circus Circus Enterprises, Inc.(1) 183,788
6,400 Eastman Kodak Co. 432,800
7,000 Mirage Resorts, Inc.(1) 143,500
100 Moevenpick Holding AG
Bearer ORD 45,831
12,300 NH Hoteles, S.A. ORD(1) 157,026
6,700 Park Place Entertainment Corp.(1) 70,350
4,700 Viacom, Inc. Cl B(1) 180,950
------------
1,370,616
------------
MACHINERY & EQUIPMENT--1.1%
240 ABB AG ORD(1) 339,883
100 Aixtron AG ORD 21,885
7,000 Brooks Automation, Inc.(1) 128,188
4,400 Case Corp. 206,800
10,900 Cooper Industries, Inc. 540,231
50 Georg Fischer AG ORD 16,303
4,400 Lam Research Corp.(1) 121,962
5,800 Premark International, Inc. 207,712
3,900 PRI Automation, Inc.(1) 95,550
1,100 Sidel SA ORD 152,467
400 Swisslog Holding AG ORD 47,140
1,000 UNION TOOL CO. ORD 63,367
------------
1,941,488
------------
MEDICAL EQUIPMENT & SUPPLIES--1.3%
600 Andrx Corp.(1) 60,356
1,000 Bard (C.R.), Inc. 45,688
6,900 Boston Scientific Corp.(1) 261,769
1,800 Closure Medical Corp.(1) 55,856
9,900 CONMED Corp.(1) 336,291
9,000 Guidant Corp. 450,000
2,500 Hillenbrand Industries, Inc. 104,844
4,200 IDEXX Laboratories, Inc.(1) 106,838
4,600 KeraVision, Inc.(1) 45,712
2,300 Novoste Corp.(1) 58,722
3,300 Ocular Sciences, Inc.(1) 100,959
3,100 Priority Healthcare Corp. Cl B(1) 106,369
900 Teleflex Inc. 39,319
4,600 VISX, Inc.(1) 238,769
4,000 Wesley Jessen VisionCare, Inc.(1) 124,125
3,500 Xomed Surgical Products, Inc.(1) 143,281
------------
2,278,898
------------
Shares Value
- --------------------------------------------------------------------------------
METALS & MINING--0.2%
4,303 Aalberts Industries N.V. ORD $ 94,172
2,400 Alcoa Inc. 132,000
12,800 Broken Hill Proprietary Co.
Ltd. ORD 131,310
------------
357,482
------------
OFFICE EQUIPMENT & SUPPLIES--0.2%
6,400 Electronics for Imaging, Inc.(1) 313,800
700 Sindo Ricoh Co. ORD 29,515
------------
343,315
------------
PACKAGING & CONTAINERS--0.2%
300 Fuji Seal, Inc. ORD 27,157
11,500 Tenneco Inc. 268,094
------------
295,251
------------
PAPER & FOREST PRODUCTS--0.5%
4,800 Consolidated Papers, Inc. 133,200
1,500 Georgia-Pacific Corp. 129,656
2,527 International Paper Co. 126,350
2,700 Rayonier, Inc. 125,888
9,300 Westvaco Corp. 265,631
1,100 Weyerhaeuser Co. 68,269
1,700 Willamette Industries, Inc. 72,038
------------
921,032
------------
PHARMACEUTICALS--3.7%
5,600 American Home Products Corp. 322,700
3,500 AstraZeneca Group plc ORD 139,053
12,100 Bristol-Myers Squibb Co. 830,362
6,400 ChiRex Inc.(1) 193,000
5,600 Forest Laboratories, Inc.(1) 266,700
4,200 Genentech, Inc.(1) 367,762
3,800 Glaxo Wellcome plc ORD 106,611
2,000 Johnson & Johnson 185,250
1,800 Lilly (Eli) & Co. 128,588
1,100 Merck & Co., Inc. 74,250
123 Novartis AG ORD 178,458
7,000 Pfizer, Inc. 749,000
9,300 Pharmacia & Upjohn Inc. 515,569
2,821 Pliva d.d. GDR 45,700
500 QLT PhotoTherapeutics Inc.(1) 21,859
25,700 Schering-Plough Corp. 1,158,106
3,200 Shire Pharmaceuticals Group
PLC ORD(1) 25,186
50,400 SkyePharma plc ORD(1) 45,196
5,000 Takeda Chemical Inds. ORD 220,960
2,500 UCB SA ORD 107,576
11,500 Warner-Lambert Co. 713,000
------------
6,394,886
------------
See Notes to Financial Statements
www.americancentury.com 47
Strategic Aggressive--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
PRINTING & PUBLISHING--0.9%
9,000 Banta Corp. $ 220,500
9,000 Deluxe Corp. 324,562
6,400 Gruppo Editoriale L'Espresso ORD 105,382
12,200 Mondadori (Arnoldo) Editore
SpA ORD 211,692
8,600 Pearson plc ORD 163,882
53,000 Seat Pagine Gialle SpA ORD 72,080
9,040 Singapore Press Holdings Ltd.
ORD 123,678
4,000 Toppan Forms Co., Ltd. ORD 75,382
4,400 VNU N.V. ORD 186,628
3,832 Wolters Kluwer NV ORD 153,950
------------
1,637,736
------------
RAILROAD--0.2%
1,100 Canadian National Railway
Company ORD 70,371
5,700 CSX Corp. 267,544
------------
337,915
------------
REAL ESTATE--0.4%
2,000 Arden Realty, Inc. 51,125
7,000 Cheung Kong (Holdings)
Ltd. ORD 56,868
14,800 City Developments Limited ORD 88,371
8,000 Corporacion GEO, S.A. de C.V.
Series B ORD(1) 31,020
29,000 DBS Land Limited ORD(1) 51,443
1,300 Equity Residential Properties Trust 62,319
9,000 Henderson Land Development
Company Ltd. ORD 45,379
2,000 Hospitality Properties Trust(1) 54,250
37,000 Keppel Land Ltd. ORD 62,846
2,800 Prologis Trust 57,225
2,800 Simon Property Group, Inc. 81,900
19,000 Singapore Land Limited ORD 52,209
------------
694,955
------------
RESTAURANTS--0.7%
24,300 CBRL Group, Inc. 419,934
15,000 Foodmaker, Inc.(1) 405,000
2,400 McDonald's Corp. 92,400
3,000 PizzaExpress plc ORD 44,678
6,100 PJ America, Inc.(1) 143,159
3,000 Skylark Co., Ltd. ORD 56,042
------------
1,161,213
------------
RETAIL (APPAREL)--0.7%
8,600 AnnTaylor Stores Corp.(1) 371,412
3,600 Chico's FAS, Inc.(1) 81,450
2,800 Children's Place Retail Stores,
Inc. (The)(1) 108,412
6,400 DM Management Co.(1) 103,000
600 Fast Retailing Co. Ltd. ORD 29,132
Shares Value
- --------------------------------------------------------------------------------
1,800 Gucci Group N.V. New
York Shares $ 119,025
14,000 Hennes & Mauritz AB Cl B ORD 314,022
1,649 Matalan PLC ORD(1) 22,023
------------
1,148,476
------------
RETAIL (FOOD & DRUG)--0.5%
5,700 CVS Corp. 262,200
4,006 Koninklijke Ahold NV ORD 139,649
9,900 Safeway Inc.(1) 460,350
3,200 Universal Corp. 83,600
------------
945,799
------------
RETAIL (GENERAL MERCHANDISE)--2.1%
5,100 Ames Department Stores, Inc.(1) 208,941
900 Carrefour SA ORD 117,992
8,000 Dillard's Inc. Cl A 281,000
100 Don Quijote Co., Ltd. ORD(1) 28,803
1,600 Douglas Holding AG ORD 68,365
3,800 Fred's, Inc. 49,638
100 Galeries Lafayette ORD 144,859
3,500 Grupo Elektra, S.A. de C.V. GDR 19,031
2,200 Homac Corp. ORD 45,624
1,500 Lands' End, Inc.(1) 64,125
3,200 May Department Stores Co. (The) 138,600
7,900 Next Plc ORD 91,781
6,700 Penney (J.C.) Company, Inc. 346,306
1,300 Pinault-Printemps-Redoute
SA ORD 221,238
300 Ryohin Keikaku Co. Limited ORD 58,733
1,900 Shinsegae Department Store
Co. ORD 84,918
4,100 ShopKo Stores, Inc.(1) 145,550
35,800 Wal-Mart Stores, Inc. 1,525,975
------------
3,641,479
------------
RETAIL (INTERNET)--0.1%
600 eBay Inc.(1) 106,256
------------
RETAIL (SPECIALTY)--1.3%
2,300 Best Buy Co., Inc.(1) 104,650
4,300 Circuit City Stores-Circuit
City Group 308,794
3,600 DeoDeo Corporation ORD 35,551
6,429 Dixons Group plc ORD 115,408
12,700 Home Depot, Inc. 722,312
9,000 Starbucks Corp.(1) 332,156
8,700 Sunglass Hut International, Inc.(1) 132,131
300 TAG Heuer International
SA ORD(1) 27,793
6,200 Toys 'R' Us, Inc.(1) 142,988
5,800 Tractor Supply Co.(1) 172,188
3,000 Yamada Denki ORD 124,182
2,200 Zale Corp.(1) 84,838
------------
2,302,991
------------
See Notes to Financial Statements
48 1-800-345-2021
Strategic Aggressive--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
STEEL(2)
9,400 Hylsamex S.A. ORD(1) $ 20,717
------------
TELEPHONE COMMUNICATIONS--5.6%
18,100 AAPT Limited ORD(1) 65,404
800 Aliant Communications, Inc. 37,600
7,100 ALLTEL Corp. 508,981
3,800 Ameritech Corp. 250,088
8,100 AT&T Corp. 449,550
5,600 Bell Atlantic Corp. 306,600
25,800 BellSouth Corp. 1,217,438
21,623 British Telecommunications
plc ORD 360,457
20,100 Cable & Wireless Communications
plc ORD(1) 190,870
30,079 Cable & Wireless Optus
Limited ORD(1) 57,484
13,582 COLT Telecom Group plc ORD(1) 286,659
400 Dacom Corp. ORD 28,874
85 Dacom Corp. Rights ORD(1) 1,864
5,542 Energis plc ORD(1) 133,653
6,000 Esat Telecom Group PLC ADR(1) 221,625
2,100 Global TeleSystems Group, Inc.(1) 159,403
12,900 GTE Corp. 813,506
2,400 Intermedia Communications Inc.(1) 60,525
3 Japan Telecom Co. Ltd. ORD 36,539
6,500 MCI WorldCom, Inc.(1) 561,234
24 Nippon Telegraph & Telephone
ORD 233,058
131,500 PT Telekomunikasi Indonesia ORD 61,135
1,200 RSL Communications, Ltd. Cl A(1) 27,075
20,900 SBC Communications Inc. 1,068,512
105 SK Telecom Co. Ltd. ADR 1,496
3,041 Sonera Group Oyj ORD 59,422
6,400 Sprint Corp. 721,600
270 Swisscom AG ORD(1) 97,227
1,100 Tele Danmark A/S ORD 112,188
23,100 Telecom Italia SpA ORD 237,848
8,226 Telefonica S.A. ORD(1) 394,174
2,900 Telefonos de Mexico,
S.A. Cl L ADR 231,819
1,800 Teleglobe Inc. ORD 54,462
4,500 Telesp Participacoes S.A. ADR 98,438
949 Telinfo NV ORD 108,467
3,400 U S WEST, Inc. 183,812
5,400 Viatel, Inc.(1) 242,325
------------
9,681,412
------------
TEXTILES & APPAREL--0.2%
2,400 Dexter Corp. (The) 93,000
4,000 Polymer Group, Inc.(1) 49,000
1,650 Quiksilver, Inc.(1) 47,025
1,700 Tommy Hilfiger Corp.(1) 127,606
Shares Value
- --------------------------------------------------------------------------------
2,300 VF Corp. $ 105,800
------------
422,431
------------
TOBACCO--0.5%
2,100 Fortune Brands, Inc. 85,838
11,100 Imperial Tobacco Group plc ORD 124,780
3,500 Philip Morris Companies Inc. 134,969
16,500 UST Inc. 503,250
------------
848,837
------------
TRANSPORTATION--0.4%
5,700 Atlas Air, Inc.(1) 153,188
3,100 Eagle USA Airfreight, Inc.(1) 146,281
4,800 Forward Air Corp.(1) 130,950
6,500 Go-Ahead Group PLC (The) ORD 91,753
2,200 Hertz Corp. Cl A 120,862
19,000 Sembcorp Logistics Limited ORD(1) 56,174
------------
699,208
------------
UTILITIES--2.0%
2,500 AES Corp. (The)(1) 124,375
15,400 AGL Resources Inc. 290,675
10,600 Ameren Corp. 433,938
2,500 Calpine Corp.(1) 135,469
66,300 Cogeneration Public Co.,
Ltd. ORD(1) 50,011
2,300 Energy East Corp. 63,825
10,200 Florida Progress Corp. 427,762
13,600 FPL Group, Inc. 791,350
2,150 KN Energy, Inc. 46,091
1,600 Korea Electric Power Corp. ORD 48,978
5,100 LG&E Energy Corp. 116,344
4,000 Minnesota Power & Light Co. 86,000
8,500 Nevada Power Co. 213,562
2,500 Northeast Utilities(1) 44,062
5,000 Sempra Energy 107,500
6,300 Southern Co. 178,762
4,100 Texas Utilities Co. 184,500
4,300 Utilicorp United Inc. 107,231
982 Vestas Wind Systems A/S ORD(1) 67,411
------------
3,517,846
------------
WIRELESS COMMUNICATIONS--1.7%
13,200 AirTouch Communications, Inc.(1) 1,326,600
9,000 Europolitan Holdings AB ORD 77,924
1,900 Nextel Communications, Inc.(1) 70,003
5,200 Nokia Corp. ADR Cl A 369,200
4 NTT Mobile Communication
Network, Inc. ORD 217,586
6,400 Orange plc ORD(1) 88,548
670 Panafon SA ORD(1) 16,650
9,600 Pinnacle Holdings Inc.(1) 173,700
1,000 Sprint PCS(1) 45,000
18,500 Vodafone Group plc ORD 352,241
See Notes to Financial Statements
www.americancentury.com 49
Strategic Aggressive--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
Shares/Principal Amount Value
- --------------------------------------------------------------------------------
3,300 VoiceStream Wireless Corp.(1) $ 89,100
3,400 Western Wireless Corp. Cl A(1) 83,194
------------
2,909,746
------------
TOTAL COMMON STOCKS & RIGHTS 131,290,486
------------
(Cost $105,788,389)
PREFERRED STOCKS--0.5%
ENERGY (PRODUCTION & MARKETING)--0.1%
870,000 Petroleo Brasileiro S.A. ORD 122,564
------------
FINANCIAL SERVICES--0.3%
910 Marschollek, Lautenschlaeger und
Partner AG ORD 474,178
------------
RETAIL (SPECIALTY)(2)
1,500 Fielmann AG ORD 58,465
------------
TELEPHONE COMMUNICATIONS(2)
4,400,000 Embratel Participacoes S.A. ORD 60,970
------------
UTILITIES--0.1%
4,830,000 Centrais Electricas Brasileiras
S.A. Cl B ORD 101,229
------------
WIRELESS COMMUNICATIONS(2)
15,100,000 Tele Sudeste Celular
Participacoes S.A. ORD 71,577
------------
TOTAL PREFERRED STOCKS 888,983
------------
(Cost $568,212)
U.S. TREASURY SECURITIES--1.9%
$ 600,000 U.S. Treasury Notes, 7.75%,
11/30/99 608,446
750,000 U.S. Treasury Notes, 5.50%,
3/31/00 752,836
150,000 U.S. Treasury Notes, 6.625%,
7/31/01 153,571
175,000 U.S. Treasury Notes, 5.75%,
8/15/03 175,371
200,000 U.S. Treasury Notes, 7.875%,
11/15/04 219,550
250,000 U.S. Treasury Notes, 4.75%,
11/15/08 232,646
350,000 U.S. Treasury Notes, 5.50%,
5/15/09 346,820
250,000 U.S. Treasury Bonds, 8.75%,
5/15/17 320,698
300,000 U.S. Treasury Bonds, 6.125%,
11/15/27 303,434
100,000 U.S. Treasury Bonds, 5.25%,
11/15/28 90,581
------------
TOTAL U.S. TREASURY SECURITIES 3,203,953
------------
(Cost $3,234,884)
Principal Amount Value
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY SECURITIES--0.8%
$ 500,000 FHLB, 5.71%, 3/19/03 $ 495,671
1,000,000 FNMA MTN, 6.23%, 7/21/08 971,476
------------
TOTAL U.S. GOVERNMENT
AGENCY SECURITIES 1,467,147
------------
(Cost $1,497,675)
U.S. GOVERNMENT AGENCY DISCOUNT NOTES--0.2%
300,000 FHLB Discount Notes, 5.00%,
7/13/99(3) 298,398
------------
(Cost $298,250)
SOVEREIGN GOVERNMENTS & AGENCIES--5.4%
USD 500,000 Argentine Discount Notes, VRN,
6.00%, 11/30/99, resets
semi-annually off the 6-month
LIBOR plus 0.8125% with
no caps 347,500
AUD 550,000 Australian Government, 9.50%,
8/15/03 410,166
EURO 792,339 Deutschland Republic, 4.75%,
7/4/98 784,036
EURO 2,607,263 Deutschland Republic, 6.00%,
9/15/03 3,008,167
CAD 240,000 Government of Canada, 5.00%,
3/15/00 162,835
CAD 400,000 Government of Canada, 6.00%,
6/1/08 282,072
JPY 120,000,000 Japan Global, 3.30%, 6/20/06 1,131,712
DKK 1,650,000 Kingdom of Denmark, 8.00%,
3/15/06 281,896
USD 100,000 Quebec Province, 8.80%,
4/15/03 108,520
USD 232,500 Republic of Argentina, VRN,
5.94%, 9/30/99, resets
semi-annually off the 6-month
LIBOR plus 0.8125% with
no caps 195,009
USD 896,460 Republic of Brazil, 8.00%,
4/15/14(4) 563,649
USD 250,000 Republic of Venezuela, VRN,
Series W-A, 5.875%,
10/25/99, resets semi-annually
off the 6-month LIBOR plus
0.8125% with no caps 160,625
GBP 90,000 U.K. Treasury Bonds, 7.50%,
12/7/06 165,956
GBP 350,000 U.K. Treasury Bonds, 9.00%,
8/6/12 774,573
USD 250,000 United Mexican States, 8.50%,
9/15/02 254,062
See Notes to Financial Statements
50 1-800-345-2021
Strategic Aggressive--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
Principal Amount Value
- --------------------------------------------------------------------------------
USD 750,000 United Mexican States, VRN,
5.875%, 11/4/99, resets
semi-annually off the 6-month
LIBOR plus 0.8125% with
no caps $ 624,375
------------
TOTAL SOVEREIGN GOVERNMENTS
& AGENCIES 9,255,153
------------
(Cost $9,904,849)
MORTGAGE-BACKED SECURITIES(5)-2.0%
$ 76,778 FHLMC Pool #E68523, 6.50%,
12/1/12 76,779
231,940 FNMA Pool #377181, 6.50%,
4/1/12 231,460
66,944 FNMA Pool #250576, 7.00%,
6/1/26 67,173
507,351 FNMA Pool #373510, 7.50%,
3/1/27 519,000
393,971 FNMA Pool #412562, 6.50%,
1/1/28 385,888
69,954 GNMA Pool #397233, 9.50%,
2/20/25 74,956
20,319 GNMA Pool #392995, 8.75%,
3/15/25 21,609
103,858 GNMA Pool #416856, 7.50%,
10/15/25 106,432
293,861 GNMA Pool #398509, 6.00%,
3/15/26 279,986
111,573 GNMA Pool #372335, 7.50%,
4/15/26 114,321
64,464 GNMA Pool #402682, 7.50%,
6/15/26 66,052
272,771 GNMA Pool #457351, 7.00%,
12/15/27 273,662
356,858 GNMA Pool #436194, 6.50%,
2/15/28 348,689
262,635 GNMA Pool #403770, 6.50%,
3/15/28 256,623
589,415 GNMA Pool #466804, 6.50%,
4/15/28 575,923
------------
TOTAL MORTGAGE-BACKED SECURITIES 3,398,553
------------
(Cost $3,419,671)
ASSET-BACKED SECURITIES(5)-1.0%
300,000 AMRESCO, INC., Series 1998-2,
Class A4 SEQ, 6.45%, 4/25/27 296,944
300,000 CIT RV Trust, Series 1998 A,
Class A4 SEQ, 6.09%,
2/15/12 298,900
100,000 Comed Transitional Funding Trust,
Series 1998-1, Class A6 SEQ,
5.63%, 6/25/09 95,066
Principal Amount Value
- --------------------------------------------------------------------------------
$ 300,000 GMAC Commercial Mortgage
Securities Inc., Series 1999 C1,
Class A2 SEQ, 6.18%, 5/15/33 $ 288,452
200,000 Money Store (The) Home Equity
Trust, Series 1997 C, Class
AF6 SEQ, 6.67%, 2/15/25 201,401
189,296 Morgan Stanley Capital I, Series 1998 WF1, Class
A1 SEQ,
6.25%, 7/15/07 187,151
96,904 Nationslink Funding Corp.,
Series 1998-2, Class A1 SEQ,
6.00%, 11/20/07 94,748
200,000 Nationslink Funding Corp.,
Series 1999-1, Class A2 SEQ,
6.32%, 11/20/08 194,303
36,076 Textron Financial Corp. Receivables
Trust, Series 1997 A, Class A,
6.05%, 3/16/09 (Acquired
9/18/97, Cost $36,028)(6) 36,150
100,000 United Companies Financial Corp.,
Home Equity Loan, Series
1997 C, Class A7, 6.85%,
1/15/29 100,548
------------
TOTAL ASSET-BACKED SECURITIES 1,793,663
------------
(Cost $1,830,057)
CORPORATE BONDS--7.5%
AIRLINES--0.2%
150,000 Continental Airlines, Inc., 8.00%,
12/15/05 149,438
150,000 United Air Lines, 9.00%,
12/15/03 159,804
------------
309,242
------------
AUTOMOBILES & AUTO PARTS--0.1%
150,000 Lear Corp., 7.96%, 5/15/05
(Acquired 5/13/99, Cost
$150,000)(6) 150,000
------------
BANKING--1.3%
500,000 American Express Centurion Bank,
VRN, 4.85%, 6/18/99, resets
monthly off the 1-month LIBOR
minus 0.055% with no caps 499,995
500,000 Bay View Capital Corp., 9.125%,
8/15/02 465,000
300,000 Citigroup Inc., 7.125%, 5/15/06 303,661
1,000,000 KeyBank N.A., VRN, 4.84%,
6/1/99, resets daily off
the Federal Funds rate plus 0.03%
with no caps 1,000,000
------------
2,268,656
------------
See Notes to Financial Statements
www.americancentury.com 51
Strategic Aggressive--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
Principal Amount Value
- --------------------------------------------------------------------------------
BROADCASTING & MEDIA--0.3%
$ 500,000 Charter Communication Holdings
LLC, 8.625%, 4/1/09 (Acquired
3/12/99, Cost $498,475)(6) $ 492,500
100,000 Tele-Communications Inc.,
8.25%, 1/15/03 105,911
------------
598,411
------------
CHEMICALS & RESINS--0.1%
250,000 Lyondell Chemical Co., Series B,
9.875%, 5/1/07 (Acquired
5/11/99, Cost $253,750)(6) 253,438
------------
DIVERSIFIED COMPANIES--0.1%
100,000 Hutchison Whampoa Financial,
7.50%, 8/1/27 (Acquired
4/7/99, Cost $86,859)(6) 87,163
------------
ELECTRICAL & ELECTRONIC
COMPONENTS--0.5%
350,000 Anixter International Inc., 8.00%,
9/15/03 355,101
250,000 DII Group, Inc., 8.50%, 9/15/07
(Acquired 9/17/97, Cost
$250,000)(6) 251,562
250,000 Trench Electric & Trench Inc.,
10.25%, 12/15/07 247,188
------------
853,851
------------
ENERGY (PRODUCTION & MARKETING)--1.1%
250,000 Belco Oil & Gas Corp., Series B,
10.50%, 4/1/06 256,562
100,000 Enron Corp., 6.625%, 11/15/05 98,075
500,000 Ocean Energy, Inc., 9.75%,
10/1/06 515,625
525,000 Oryx Energy Co., 8.375%,
7/15/04 558,077
200,000 Triton Energy Ltd., 8.75%,
4/15/02 199,500
200,000 USX Corp., 6.65%, 2/1/06 194,029
------------
1,821,868
------------
ENERGY (SERVICES)--0.3%
500,000 Cliffs Drilling Company, 10.25%,
5/15/03 505,625
100,000 Petroleum Geo-Services ASA,
7.125%, 3/30/28 93,691
------------
599,316
------------
FINANCIAL SERVICES--0.7%
100,000 Ford Motor Credit Co., 6.55%,
9/10/02 100,716
100,000 General Motors Acceptance Corp.,
8.50%, 2/4/02 105,590
1,000,000 USL Capital Corp. MTN, Series D,
6.18%, 11/8/99 1,003,354
------------
1,209,660
------------
Principal Amount Value
- --------------------------------------------------------------------------------
FOOD & BEVERAGE--0.2%
$ 200,000 Pepsi Bottling Group Inc., 5.625%,
2/17/09 (Acquired 2/3/99,
Cost $199,134)(6) $ 186,577
150,000 Pepsi Bottling Group Inc., 7.00%,
3/1/29 (Acquired 3/3/99,
Cost $148,980)(6) 145,426
------------
332,003
------------
HEALTHCARE--0.3%
100,000 Aetna Services, Inc., 6.75%,
8/15/01 100,695
500,000 Tenet Healthcare Corp., 7.875%,
1/15/03 492,947
------------
593,642
------------
INSURANCE--0.1%
200,000 Conseco Inc., 6.40%, 6/15/01 196,280
------------
LEISURE--0.1%
125,000 Time Warner Inc., 8.11%,
8/15/06 133,888
------------
MACHINERY & EQUIPMENT--0.1%
250,000 United Rentals, Inc., Series B,
9.50%, 6/1/08 254,062
------------
METALS & MINING--0.1%
250,000 Golden Northwest Aluminum,
12.00%, 12/15/06 (Acquired
12/14/98, Cost $250,000)(6) 257,500
------------
OFFICE EQUIPMENT & SUPPLIES--0.1%
100,000 Xerox Capital Trust, 8.00%,
2/1/27 (Acquired 7/17/97,
Cost $104,024)(6) 102,469
------------
PACKAGING & CONTAINERS--0.1%
150,000 Owens-Illinois Inc., 7.15%,
5/15/05 144,525
------------
PAPER & FOREST PRODUCTS--0.1%
150,000 Fort James Corp., 6.625%,
9/15/04 150,609
------------
REAL ESTATE--0.2%
275,000 Spieker Properties, Inc., 6.80%,
12/15/01 275,242
------------
RETAIL (FOOD & DRUG)--0.1%
150,000 Rite Aid Corp., 6.70%, 12/15/01 150,409
------------
RETAIL (SPECIALTY)--0.1%
250,000 Sonic Automotive, Inc., Series B,
11.00%, 8/1/08 248,125
------------
STEEL--0.1%
150,000 Pohang Iron & Steel Co., Ltd.,
7.375%, 5/15/05 143,442
------------
See Notes to Financial Statements
52 1-800-345-2021
Strategic Aggressive--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
Principal Amount Value
- --------------------------------------------------------------------------------
TELEPHONE COMMUNICATIONS--0.7%
$ 100,000 Cincinnati Bell Inc., 6.30%,
12/1/28 $ 90,967
150,000 GTE North Inc., Series H, 5.65%,
11/15/08 140,092
100,000 MCI WorldCom, Inc., 7.55%,
4/1/04 103,651
100,000 MCI WorldCom, Inc., 6.40%,
8/15/05 98,139
250,000 Qwest Communications
International Inc., Series B,
7.44%, 2/1/03(7) 192,187
550,000 Qwest Communications
International Inc., Series B,
7.50%, 11/1/08 555,851
100,000 Sprint Capital Corp., 6.875%,
11/15/28 94,075
------------
1,274,962
------------
UTILITIES--0.2%
100,000 PG&E Corp., 6.25%, 3/1/04 99,745
200,000 Southern Investments UK, 6.80%,
12/1/06 198,040
------------
297,785
------------
WIRELESS COMMUNICATIONS--0.2%
150,000 360 Communications Co.,
7.125%, 3/1/03 153,100
150,000 TCI Communications, Inc., 8.75%,
8/1/15 177,082
------------
330,182
------------
TOTAL CORPORATE BONDS 13,036,730
------------
(Cost $13,173,616)
COMMERCIAL PAPER(3)--2.3%
ENERGY (PRODUCTION & MARKETING)--0.5%
500,000 Motiva Enterprises LLC, 4.90%,
8/26/99 (Acquired 5/28/99,
Cost $493,875)(6) 493,827
350,000 Statoil-Den Norske Stats, 4.79%,
6/17/99 (Acquired 5/13/99,
Cost $348,370)(6) 349,056
------------
842,883
------------
FINANCIAL SERVICES--1.3%
500,000 Ford Motor Credit Co., 4.82%,
10/6/99 490,956
1,000,000 General Electric Capital Corp.,
4.80%, 10/1/99 982,625
388,000 Quincy Capital Corp., 4.84%,
7/9/99 (Acquired 5/13/99,
Cost $385,027)(6) 385,796
Principal Amount Value
- --------------------------------------------------------------------------------
$ 400,000 Windmill Funding Corp., 4.82%,
7/14/99 (Acquired 5/13/99,
Cost $396,680)(6) $ 397,453
------------
2,256,830
------------
INDUSTRIAL--0.2%
400,000 Siebe plc, 4.82%, 8/11/99
(Acquired 5/13/99, Cost
$395,180)(6) 395,902
------------
INSURANCE--0.3%
475,000 Transamerica Occidental Life
Insurance Co., 4.82%, 7/19/99
(Acquired 5/13/99, Cost
$470,739)(6) 471,648
------------
TOTAL COMMERCIAL PAPER 3,967,263
------------
(Cost $3,970,493)
TEMPORARY CASH INVESTMENTS--2.5%
Repurchase Agreement, Merrill Lynch & Co.,
Inc., (U.S. Treasury obligations), in a joint
trading account at 4.75%, dated 5/28/99,
due 6/1/99 (Delivery value $4,402,322) 4,400,000
------------
(Cost $4,400,000)
TOTAL INVESTMENT SECURITIES--100.0% $173,000,329
============
(Cost $148,086,096)
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Contracts Settlement Unrealized
to Sell Date Value Gain/Loss
- -----------------------------------------------------------------------------
164,503 CHF 6/30/99 $ 108,035 $647
3,027,821 EURO 6/30/99 3,161,236 21,603
420,438 GBP 6/30/99 673,059 (1,420)
107,173,560 JPY 6/30/99 885,293 (840)
438,924 SEK 6/30/99 51,083 274
--------------- ------------
$4,878,706 $20,264
=============== ============
(Value on Settlement Date $4,898,970)
Forward foreign currency exchange contracts are used by the portfolio management
team in an effort to protect foreign investments against declines in foreign
currencies. This is also known as hedging. The contracts are called "forward"
because they allow your fund to exchange a foreign currency for U.S. dollars at
a date in the future--and at a price (known as the exchange rate) agreed upon
when the contract is initially entered into.
See Notes to Financial Statements
www.americancentury.com 53
Strategic Aggressive--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
NOTES TO SCHEDULE OF INVESTMENTS
ADR = American Depositary Receipt
AUD = Australian Dollar
CAD = Canadian Dollar
CHF = Swiss Franc
DKK = Danish Krone
FHLB = Federal Home Loan Bank
FHLMC = Federal Home Loan Mortgage Corporation
FNMA = Federal National Mortgage Association
GBP = British Pound
GDR = Global Depositary Receipt
GNMA = Government National Mortgage Association
JPY = Japanese Yen
LIBOR = London Interbank Offered Rate
MTN = Medium Term Note
ORD = Foreign Ordinary Share
SEK = Swedish Krona
VRN = Variable Rate Note. Interest reset date is indicated and used in
calculating the weighted average portfolio maturity. Rate shown is effective May
31, 1999.
resets = The frequency with which a security's coupon changes, based on current
market conditions or an underlying index. The more frequently a security resets,
the less risk the investor is taking that the coupon will vary significantly
from current market rates.
(1) Non-income producing.
(2) Industry is less than 0.05% of total investment securities.
(3) Rate indicated is the yield to maturity at purchase.
(4) Coupon payments may consist of a combination of cash and additional
securities.
(5) Final maturity indicated. Expected remaining maturity used for purposes of
calculating the weighted average portfolio maturity.
(6) Security was purchased under Rule 144A or Section 4(2) of the Securities
Act of 1933 or is a private placement and, unless registered under the Act
or exempted from registration, may only be sold to qualified institutional
investors. The aggregate value of restricted securities at May 31, 1999,
was $4,456,467, which represented 2.6% of net assets.
(7) Step-coupon security. Yield to maturity at purchase is indicated. These
securities become interest bearing at a predetermined rate and future date
and are purchased at a substantial discount from their value at maturity.
- --------------------------------------------------------------------------------
UNDERSTANDING THE SCHEDULE OF INVESTMENTS--This schedule tells you which
investments your fund owned on the last day of the reporting period.
The schedule includes:
* a list of each investment
* the share amount (stocks) or principal amount (bonds) of each investment
* the market value of each investment
* the percentage of investments in each industry, as applicable
* the percent and dollar breakdown of each investment category
See Notes to Financial Statements
54 1-800-345-2021
<TABLE>
<CAPTION>
Statements of Assets and Liabilities
- --------------------------------------------------------------------------------
STRATEGIC STRATEGIC STRATEGIC
ALLOCATION: ALLOCATION: ALLOCATION:
MAY 31, 1999 (UNAUDITED) CONSERVATIVE MODERATE AGGRESSIVE
ASSETS
<S> <C> <C> <C>
Investment securities, at value
(identified cost of $185,834,787,
$281,564,974 and $148,086,096,
respectively) (Note 3) ............. $198,660,956 $312,670,191 $173,000,329
Foreign currency holdings, at value
(identified cost of $18,436,
$488,661, and $474,499,
respectively) ...................... 18,436 490,799 475,537
Cash ................................. 1,473 -- --
Receivable for investments sold ...... 3,314,964 3,969,561 2,956,050
Receivable for forward foreign
currency exchange contracts ........ 14,771 36,725 22,524
Dividends and interest receivable .... 1,739,201 2,143,438 857,217
------------ ------------ ------------
203,749,801 319,310,714 177,311,657
------------ ------------ ------------
LIABILITIES
Disbursements in excess of
demand deposit cash ................ -- 89,234 256,287
Payable for investments purchased .... 3,908,178 5,487,745 3,761,674
Payable for forward foreign
currency exchange contracts ........ 1,573 3,646 2,260
Accrued management fees (Note 2) ..... 170,307 293,228 177,026
Distribution fees payable (Note 2) ... 1,417 3,212 2,523
Service fees payable (Note 2) ........ 1,417 3,212 2,523
Payable for directors' fees
and expenses ....................... 98 78 91
------------ ------------ ------------
4,082,990 5,880,355 4,202,384
------------ ------------ ------------
Net assets ........................... $199,666,811 $313,430,359 $173,109,273
============ ============ ============
NET ASSETS CONSIST OF:
Capital (par value and
paid in surplus) ................... $184,584,435 $279,038,268 $145,657,428
Undistributed net investment income .. 1,141,152 1,238,817 1,050,251
Accumulated undistributed net
realized gain from investment
and foreign currency transactions .. 1,101,206 2,016,277 1,466,068
Net unrealized appreciation on
investments and translation of
assets and liabilities in foreign
currencies (Note 3) ................ 12,840,018 31,136,997 24,935,526
------------ ------------ ------------
$199,666,811 $313,430,359 $173,109,273
============ ============ ============
Investor Class, $0.01 Par Value
Net assets ........................... $192,920,444 $298,472,254 $161,432,899
Shares outstanding ................... 34,896,038 47,304,198 23,769,880
Net asset value per share ............ $ 5.53 $ 6.31 $ 6.79
Advisor Class, $0.01 Par Value
Net assets ........................... $ 6,746,367 $ 14,958,105 $ 11,676,374
Shares outstanding ................... 1,221,283 2,372,796 1,721,078
Net asset value per share ............ $ 5.52 $ 6.30 $ 6.78
</TABLE>
- --------------------------------------------------------------------------------
UNDERSTANDING THE STATEMENTS OF ASSETS AND LIABILITIES--This statement details
what the fund owns (assets), what it owes (liabilities), and its net assets as
of the last day of the period. If you subtract what the fund owes from what it
owns, you get the fund's net assets. For each class of shares, the net assets
divided by the total number of shares outstanding gives you the price of an
individual share, or the net asset value per share.
NET ASSETS are also broken down by capital (money invested by shareholders); net
investment income not yet paid to shareholders; net gains earned on investment
activity but not yet paid to shareholders or net losses on investment activity
(known as realized gains or losses); and finally, gains or losses on securities
still owned by the fund (known as unrealized appreciation or depreciation). This
breakdown tells you the value of net assets that are performance-related, such
as investment gains or losses, and the value of net assets that are not related
to performance, such as shareholder investments and redemptions.
See Notes to Financial Statements
www.americancentury.com 55
Statements of Operations
- --------------------------------------------------------------------------------
STRATEGIC STRATEGIC STRATEGIC
FOR THE SIX MONTHS ALLOCATION: ALLOCATION: ALLOCATION:
ENDED MAY 31, 1999 (UNAUDITED) CONSERVATIVE MODERATE AGGRESSIVE
INVESTMENT INCOME
Income:
Interest ........................... $3,325,691 $ 3,450,265 $ 1,208,516
Dividends (net of foreign taxes
withheld of $17,577, $48,091,
and $34,765, respectively) ....... 647,430 1,234,142 763,090
---------- ----------- -----------
3,973,121 4,684,407 1,971,606
---------- ----------- -----------
Expenses (Note 2):
Management fees .................... 974,372 1,603,075 987,913
Distribution fees -- Advisor Class . 8,214 18,011 14,077
Service fees -- Advisor Class ...... 8,214 18,011 14,077
Directors' fees and expenses ....... 769 1,400 697
---------- ----------- -----------
991,569 1,640,497 1,016,764
---------- ----------- -----------
Net investment income .............. 2,981,552 3,043,910 954,842
---------- ----------- -----------
REALIZED AND UNREALIZED
GAIN ON INVESTMENTS AND
FOREIGN CURRENCY (NOTE 3)
Net realized gain on:
Investments ........................ 2,432,191 4,138,685 2,726,123
Foreign currency transactions ...... 117,258 248,090 155,848
---------- ----------- -----------
2,549,449 4,386,775 2,881,971
---------- ----------- -----------
Change in net unrealized
appreciation on:
Investments ........................ 1,405,597 9,191,321 8,518,988
Translation of assets and
liabilities in foreign
currencies ....................... 8,254 18,692 11,923
---------- ----------- -----------
1,413,851 9,210,013 8,530,911
---------- ----------- -----------
Net realized and unrealized
gain on investments and
foreign currency ................. 3,963,300 13,596,788 11,412,882
---------- ----------- -----------
Net Increase in Net Assets
Resulting from Operations ........ $6,944,852 $16,640,698 $12,367,724
========== =========== ===========
- --------------------------------------------------------------------------------
UNDERSTANDING THE STATEMENTS OF OPERATIONS--This statement breaks down how each
fund's net assets changed during the period as a result of the fund's
operations. It tells you how much money the fund made or lost after taking into
account income, fees and expenses, and investment gains or losses. It does not
include shareholder transactions and distributions.
Fund OPERATIONS include:
* interest and dividend income
* management fees and other expenses
* gains or losses from selling investments (known as realized gains or losses)
* gains or losses on current fund holdings (known as unrealized appreciation or
depreciation)
See Notes to Financial Statements
56 1-800-345-2021
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
SIX MONTHS ENDED MAY 31, 1999 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 1998
STRATEGIC ALLOCATION: STRATEGIC ALLOCATION: STRATEGIC ALLOCATION:
CONSERVATIVE MODERATE AGGRESSIVE
Increase in Net Assets 1999 1998 1999 1998 1999 1998
OPERATIONS
<S> <C> <C> <C> <C> <C> <C>
Net investment income ......... $ 2,981,552 $ 5,876,472 $ 3,043,910 $ 6,006,752 $ 954,842 $ 2,075,131
Net realized gain on
investments and foreign
currency transactions ....... 2,549,449 4,808,349 4,386,775 7,826,734 2,881,971 3,332,508
Change in net unrealized
appreciation on investments
and translation of assets
and liabilites in
foreign currencies .......... 1,413,851 4,669,595 9,210,013 10,098,992 8,530,911 6,656,675
------------- ------------- ------------- ------------- ------------- -------------
Net increase in net assets
resulting from operations ... 6,944,852 15,354,416 16,640,698 23,932,478 12,367,724 12,064,314
------------- ------------- ------------- ------------- ------------- -------------
DISTRIBUTIONS TO
SHAREHOLDERS
From net investment income:
Investor Class .............. (2,612,442) (5,800,329) (2,795,111) (5,873,919) (1,746,451) (1,584,225)
Advisor Class ............... (90,131) (187,045) (124,222) (276,208) (97,114) (95,179)
From net realized gains on
investment transactions:
Investor Class .............. (5,992,784) (7,295,786) (9,046,725) (6,635,893) (3,801,609) (3,703,277)
Advisor Class ............... (213,170) (204,754) (452,461) (295,112) (264,507) (268,899)
------------- ------------- ------------- ------------- ------------- -------------
Decrease in net assets
from distributions .......... (8,908,527) (13,487,914) (12,418,519) (13,081,132) (5,909,681) (5,651,580)
------------- ------------- ------------- ------------- ------------- -------------
CAPITAL SHARE
TRANSACTIONS (NOTE 4)
Net increase in net assets
from capital share
transactions ................ 14,064,478 24,713,711 34,236,497 54,162,988 11,297,688 31,349,164
------------- ------------- ------------- ------------- ------------- -------------
Net increase in net assets .... 12,100,803 26,580,213 38,458,676 65,014,334 17,755,731 37,761,898
NET ASSETS
Beginning of period ........... 187,566,008 160,985,795 274,971,683 209,957,349 155,353,542 117,591,644
------------- ------------- ------------- ------------- ------------- -------------
End of period ................. $ 199,666,811 $ 187,566,008 $ 313,430,359 $ 274,971,683 $ 173,109,273 $ 155,353,542
============= ============= ============= ============= ============= =============
Undistributed net
investment income ........... $ 1,141,152 $ 862,173 $ 1,238,817 $ 1,114,240 $ 1,050,251 $ 1,938,974
============= ============= ============= ============= ============= =============
</TABLE>
- --------------------------------------------------------------------------------
UNDERSTANDING THE STATEMENTS OF CHANGES IN NET ASSETS--These statements show how
each fund's net assets changed over the past two reporting periods. It details
how much a fund grew or shrank as a result of:
* operations--a summary of the Statement of Operations from the previous page
for the most recent period
* distributions--income and gains distributed to shareholders
* capital share transactions--shareholders' purchases, reinvestments, and
redemptions
Net assets at the beginning of the period plus the sum of operations,
distributions to shareholders and capital share transactions result in net
assets at the end of the period.
See Notes to Financial Statements
www.americancentury.com 57
Notes to Financial Statements
- --------------------------------------------------------------------------------
MAY 31, 1999 (UNAUDITED)
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION -- American Century Strategic Asset Allocations, Inc. (the
corporation) is registered under the Investment Company Act of 1940 as an
open-end diversified management investment company. Strategic Allocation:
Conservative Fund, Strategic Allocation: Moderate Fund and Strategic Allocation:
Aggressive Fund (the funds) are three of the funds currently issued by the
corporation. The funds' investment objective is to provide as high a level of
total return (capital appreciation plus dividend and interest income) as is
consistent with each fund's risk profile. The funds seek to achieve this by
diversifying investments among three asset classes - equity securities, bonds
and cash equivalent instruments, the mix of which will depend on the risk
profile of each fund. The funds are authorized to issue two classes of shares:
the Investor Class and the Advisor Class. The two classes of shares differ
principally in their respective shareholder servicing and distribution expenses
and arrangements. All shares of each fund represent an equal pro rata interest
in the assets of the class to which such shares belong, and have identical
voting, dividend, liquidation and other rights and the same terms and
conditions, except for class specific expenses and exclusive rights to vote on
matters affecting only individual classes. The following significant accounting
policies are in accordance with generally accepted accounting principles; these
principles may require the use of estimates by fund management.
SECURITY VALUATIONS -- Portfolio securities traded primarily on a principal
securities exchange are valued at the last reported sales price, or the mean of
the latest bid and asked prices where no last sales price is available.
Securities traded over-the-counter are valued at the mean of the latest bid and
asked prices or, in the case of certain foreign securities, at the last reported
sales price, depending on local convention or regulation. Debt securities not
traded on a principal securities exchange are valued through a commercial
pricing service or at the mean of the most recent bid and asked prices. When
valuations are not readily available, securities are valued at fair value as
determined in accordance with procedures adopted by the Board of Directors.
SECURITY TRANSACTIONS -- Security transactions are accounted for as of the
trade date. Net realized gains and losses are determined on the identified cost
basis, which is also used for federal income tax purposes.
INVESTMENT INCOME -- Dividend income less foreign taxes withheld (if any) is
recorded as of the ex-dividend date. Interest income is recorded on the accrual
basis and includes accretion of discounts and amortization of premiums.
FOREIGN CURRENCY TRANSACTIONS -- All assets and liabilities initially
expressed in foreign currencies are translated into U.S. dollars at prevailing
exchange rates at period end. Purchases and sales of investment securities,
dividend and interest income, and certain expenses are translated at the rates
of exchange prevailing on the respective dates of such transactions. For assets
and liabilities, other than investments in securities, net realized and
unrealized gains and losses from foreign currency translations arise from
changes in currency exchange rates.
Net realized and unrealized foreign currency exchange gains or losses
occurring during the holding period of investment securities are a component of
realized gain (loss) on investments and unrealized appreciation (depreciation)
on investments, respectively.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS -- The funds may enter into
forward foreign currency exchange contracts to facilitate transactions of
securities denominated in a foreign currency or to hedge the fund's exposure to
foreign currency exchange rate fluctuations. The net U.S. dollar value of
foreign currency underlying all contractual commitments held by the funds and
the resulting unrealized appreciation or depreciation are determined daily using
prevailing exchange rates. The funds bear the risk of an unfavorable change in
the foreign currency exchange rate underlying the forward contract.
Additionally, losses may arise if the counterparties do not perform under the
contract terms.
REPURCHASE AGREEMENTS -- The funds may enter into repurchase agreements with
institutions that the funds' investment manager, American Century Investment
Management, Inc. (ACIM), has determined are creditworthy pursuant to criteria
adopted by the Board of Directors. Each repurchase agreement is recorded at
cost. The funds require that the collateral, represented by securities, received
in a repurchase transaction be transferred to the custodian in a manner
sufficient to enable the funds to obtain those securities in the event of a
default under the repurchase agreement. ACIM monitors, on a daily basis, the
securities transferred to ensure the value, including accrued interest, of the
securities under each repurchase agreement is equal to or greater than amounts
owed to the funds under each repurchase agreement.
JOINT TRADING ACCOUNT -- Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the funds, along with other registered
investment companies having management agreements with ACIM, may transfer
uninvested cash balances into a joint trading account. These balances are
invested in one or more repurchase agreements that are collateralized by U.S.
Treasury or Agency obligations.
INCOME TAX STATUS -- It is the funds' policy to distribute all net
investment income and net realized gains to shareholders and to otherwise
qualify as a regulated investment company under provisions of the Internal
Revenue Code. Accordingly, no provision has been made for federal or state
income taxes.
DISTRIBUTIONS TO SHAREHOLDERS -- Distributions to shareholders are recorded
on the ex-dividend date. Distributions from net investment income are declared
and paid quarterly, with the exception of those for Strategic Allocation:
Aggressive, which are declared and paid annually. Distributions from net
realized gains are declared and paid annually, usually in December, but the
funds may make distributions on a more frequent basis to comply with the
distribution requirements of the Internal Revenue Code, in all events in a
manner consistent with provisions of the Investment Company Act.
The character of distributions made during the year from net investment
income or net realized gains may differ from their ultimate characterization for
federal income tax purposes. These differences reflect the differing character
58 1-800-345-2021
Notes to Financial Statements
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
of certain income items and net realized gains and losses for financial
statement and tax purposes and may result in reclassification among certain
capital accounts.
ADDITIONAL INFORMATION -- Funds Distributor, Inc. (FDI) is the corporation's
distributor. Certain officers of FDI are also officers of the corporation.
- --------------------------------------------------------------------------------
2. TRANSACTIONS WITH RELATED PARTIES
The corporation has entered into a Management Agreement with ACIM that
provides each fund with investment advisory and management services in exchange
for a single, unified management fee per class. The Agreement provides that all
expenses of the funds, except brokerage commissions, taxes, interest, expenses
of those directors who are not considered "interested persons" as defined in the
Investment Company Act of 1940 (including counsel fees) and extraordinary
expenses, will be paid by ACIM. The fee is computed daily and paid monthly based
on each class's average daily closing net assets during the previous month. The
annual management fee for each class of the funds is as follows:
STRATEGIC STRATEGIC STRATEGIC
ALLOCATION: ALLOCATION: ALLOCATION:
CONSERVATIVE MODERATE AGGRESSIVE
INVESTOR ADVISOR INVESTOR ADVISOR INVESTOR ADVISOR
AVERAGE NET ASSETS
First $1 billion ... 1.00% 0.75% 1.10% 0.85% 1.20% 0.95%
Over $1 billion .... 0.90% 0.65% 1.00% 0.75% 1.10% 0.85%
The Board of Directors has adopted the Advisor Class Master Distribution and
Shareholder Services Plan (the plan), pursuant to Rule 12b-1 of the Investment
Company Act of 1940. The plan provides that the funds will pay ACIM an annual
distribution fee equal to 0.25% and service fee equal to 0.25%. The fees are
computed daily and paid monthly based on the Advisor Class's average daily
closing net assets during the previous month. The distribution fee provides
compensation for distribution expenses incurred by financial intermediaries in
connection with distributing shares of the Advisor Class including, but not
limited to, payments to brokers, dealers, and financial institutions that have
entered into sales agreements with respect to shares of the funds. The service
fee provides compensation for shareholder and administrative services rendered
by ACIM, its affiliates or independent third party providers. Fees incurred
under the plan during the six months ended May 31, 1999, were $16,428 in
Strategic Allocation: Conservative, $36,022 in Strategic Allocation: Moderate
and $28,154 in Strategic Allocation: Aggressive.
Certain officers and directors of the corporation are also officers and/or
directors, and, as a group, controlling stockholders of American Century
Companies, Inc., the parent of the corporation's investment manager, ACIM, and
the corporation's transfer agent, American Century Services Corporation.
www.americancentury.com 59
Notes to Financial Statements
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
3. INVESTMENT TRANSACTIONS
Investment transactions, excluding short-term investments, for the six months
ended May 31, 1999, were as follows:
STRATEGIC STRATEGIC STRATEGIC
ALLOCATION: ALLOCATION: ALLOCATION:
CONSERVATIVE MODERATE AGGRESSIVE
PURCHASES
Investment Securities
other than U.S. Government
& Agency Obligations ........ $83,234,812 $154,064,675 $96,025,341
U.S. Government & Agency
Obligations ................. 24,629,923 17,828,485 2,694,606
PROCEEDS FROM SALES
Investment Securities
other than U.S. Government
& Agency Obligations ........ $78,305,913 $139,524,151 $91,601,713
U.S. Government & Agency
Obligations ................. 23,480,370 12,795,420 2,512,235
On May 31, 1999, the composition of unrealized appreciation and depreciaton of
investment securities based on the aggregate cost of investments for federal
income tax purposes was as follows:
STRATEGIC STRATEGIC STRATEGIC
ALLOCATION: ALLOCATION: ALLOCATION:
CONSERVATIVE MODERATE AGGRESSIVE
Appreciation ................. $13,239,972 $32,224,636 $25,677,532
Depreciation ................. (1,841,781) (3,477,009) (2,028,969)
------------- ------------- -------------
Net .......................... $11,398,191 $28,747,627 $23,648,563
============= ============= =============
Federal Tax Cost ............. $187,262,765 $283,922,564 $149,351,766
============= ============= =============
60 1-800-345-2021
Notes to Financial Statements
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of the funds were as follows:
<TABLE>
<CAPTION>
STRATEGIC ALLOCATION: STRATEGIC ALLOCATION: STRATEGIC ALLOCATION:
CONSERVATIVE MODERATE AGGRESSIVE
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
INVESTOR CLASS
<S> <C> <C> <C> <C> <C> <C>
Authorized shares ........ 50,000,000 50,000,000 50,000,000
============ ============ ============
Six months ended
May 31, 1999
Sold ..................... 8,632,629 $47,597,724 10,611,654 $66,742,712 5,638,691 $37,723,341
Issued in reinvestment
of distributions ....... 1,435,579 7,755,366 1,939,629 11,747,743 866,756 5,527,761
Redeemed ................. (7,544,436) (41,510,914) (7,317,251) (45,730,547) (4,929,452) (32,946,355)
------------ ------------- ------------ ------------- ------------ -------------
Net increase ............. 2,523,772 $13,842,176 5,234,032 $32,759,908 1,575,995 $10,304,747
============ ============= ============ ============= ============ =============
Year ended
November 30, 1998
Sold ..................... 14,341,532 $78,794,970 23,620,687 $143,489,927 12,549,015 $80,160,388
Issued in reinvestment
of distributions ....... 2,221,536 11,843,897 2,116,707 12,429,433 895,817 5,276,602
Redeemed ................. (12,448,203) (68,202,816) (17,345,468) (105,655,521) (8,778,771) (55,922,680)
------------ ------------- ------------ ------------- ------------ -------------
Net increase ............. 4,114,865 $22,436,051 8,391,926 $50,263,839 4,666,061 $29,514,310
============ ============= ============ ============= ============ =============
ADVISOR CLASS
Authorized shares ........ 25,000,000 25,000,000 25,000,000
============ ============ ============
Six months ended
May 31, 1999
Sold ..................... 266,466 $1,464,162 569,093 $3,552,280 385,008 $2,560,141
Issued in reinvestment
of distributions ....... 56,064 303,298 95,133 576,258 56,668 361,429
Redeemed ................. (280,289) (1,545,158) (423,208) (2,651,949) (288,172) (1,928,629)
------------ ------------- ------------ ------------- ------------ -------------
Net increase ............. 42,241 $222,302 241,018 $1,476,589 153,504 $992,941
============ ============= ============ ============= ============ =============
Year ended
November 30, 1998
Sold ..................... 733,231 $4,045,949 1,851,968 $11,078,436 791,693 $5,187,411
Issued in reinvestment
of distributions ....... 73,283 391,794 97,244 571,210 61,708 364,076
Redeemed ................. (392,972) (2,160,083) (1,252,277) (7,750,497) (584,629) (3,716,633)
------------ ------------- ------------ ------------- ------------ -------------
Net increase ............. 413,542 $2,277,660 696,935 $3,899,149 268,772 $1,834,854
============ ============= ============ ============= ============ =============
</TABLE>
- --------------------------------------------------------------------------------
5. BANK LOANS
Effective December 18, 1998, the funds, along with certain other funds
managed by ACIM, entered into an unsecured $570,000,000 bank line of credit
agreement with Chase Manhattan Bank. Borrowings under the agreement bear
interest at the Federal Funds rate plus 0.40%. The funds may borrow money for
temporary or emergency purposes to fund shareholder redemptions. The funds did
not borrow from the line during the period December 18, 1998 through May 31,
1999.
www.americancentury.com 61
Notes to Financial Statements
- --------------------------------------------------------------------------------
(Continued)
MAY 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
6. FUND EVENTS
The following name changes became effective March 1, 1999:
=====================================================================
NEW NAME FORMER NAME
=====================================================================
FUND: Strategic Allocation: American Century Strategic
Conservative Fund Allocation: Conservative
FUND: Strategic Allocation: American Century Strategic
Moderate Fund Allocation: Moderate
FUND: Strategic Allocation: American Century Strategic
Aggressive Fund Allocation: Aggressive
62 1-800-345-2021
Strategic Conservative--Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED NOVEMBER 30 (EXCEPT AS NOTED)
Investor Class
1999(1) 1998 1997 1996(2)
PER-SHARE DATA
Net Asset Value, Beginning of Period .. $5.59 $5.55 $5.26 $5.00
-------- -------- -------- --------
Income From Investment Operations
Net Investment Income(3) ............ 0.08 0.18 0.19 0.13
Net Realized and Unrealized Gain
on Investment Transactions .......... 0.13 0.31 0.36 0.22
-------- -------- -------- --------
Total From Investment Operations .... 0.21 0.49 0.55 0.35
-------- -------- -------- --------
Distributions
From Net Investment Income .......... (0.08) (0.19) (0.17) (0.09)
From Net Realized Gain on
Investment Transactions ............. (0.19) (0.26) (0.09) --
-------- -------- -------- --------
Total Distributions ................. (0.27) (0.45) (0.26) (0.09)
-------- -------- -------- --------
Net Asset Value, End of Period ........ $5.53 $5.59 $5.55 $5.26
======== ======== ======== ========
Total Return(4) ..................... 3.77% 9.43% 10.87% 7.02%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets .................1.00%(5) 1.00% 1.00% 1.01%(5)
Ratio of Net Investment Income
to Average Net Assets .................3.04%(5) 3.35% 3.48% 3.67%(5)
Portfolio Turnover Rate ............... 60% 113% 124% 44%
Net Assets, End of Period
(in thousands) ........................$192,920 $180,970 $156,733 $33,110
(1) Six months ended May 31, 1999 (unaudited).
(2) February 15, 1996 (inception) through November 30, 1996.
(3) Computed using average shares outstanding throughout the period.
(4) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.
(5) Annualized.
- --------------------------------------------------------------------------------
UNDERSTANDING THE FINANCIAL HIGHLIGHTS--These statements itemize current period
activity and statistics and provide comparison data for the last five fiscal
years (or less, if the class is not five years old).
On a per-share basis, it includes:
* share price at the beginning of the period
* investment income and capital gains or losses
* income and capital gains distributions paid to shareholders
* share price at the end of the period
It also includes some key statistics for the period:
* total return--the overall percentage return of the fund, assuming reinvestment
of all distributions
* expense ratio--operating expenses as a percentage of average net assets
* net income ratio--net investment income as a percentage of average net assets
* portfolio turnover--the percentage of the portfolio that was replaced during
the period
See Notes to Financial Statements
www.americancentury.com 63
Strategic Conservative--Financial Highlights
- --------------------------------------------------------------------------------
(Continued)
FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED NOVEMBER 30 (EXCEPT AS NOTED)
Advisor Class
1999(1) 1998 1997 1996(2)
PER-SHARE DATA
Net Asset Value, Beginning of Period . $5.59 $5.56 $5.26 $5.09
-------- ------- -------- --------
Income From Investment Operations
Net Investment Income(3) ........... 0.08 0.17 0.17 0.03
Net Realized and Unrealized Gain
on Investment Transactions ......... 0.12 0.31 0.38 0.14
-------- ------- -------- --------
Total From Investment Operations ... 0.20 0.48 0.55 0.17
-------- ------- -------- --------
Distributions
From Net Investment Income ......... (0.08) (0.19) (0.16) --
From Net Realized Gain on
Investment Transactions ............ (0.19) (0.26) (0.09) --
-------- ------- -------- --------
Total Distributions ................ (0.27) (0.45) (0.25) -
-------- ------- -------- --------
Net Asset Value, End of Period ....... $5.52 $5.59 $5.56 $5.26
======== ======= ======== ========
Total Return(4) .................... 3.56% 9.06% 10.77% 3.34%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets ................1.25%(5) 1.25% 1.25% 1.25%(5)
Ratio of Net Investment Income
to Average Net Assets ................2.79%(5) 3.10% 3.23% 3.25%(5)
Portfolio Turnover Rate .............. 60% 113% 124% 44%
Net Assets, End of Period
(in thousands) ....................... $6,746 $6,596 $4,253 $3,973
(1) Six months ended May 31, 1999 (unaudited).
(2) October 2, 1996 (commencement of sale) through November 30, 1996.
(3) Computed using average shares outstanding throughout the period.
(4) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.
(5) Annualized.
See Notes to Financial Statements
64 1-800-345-2021
Strategic Moderate--Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED NOVEMBER 30 (EXCEPT AS NOTED)
Investor Class
1999(1) 1998 1997 1996(2)
PER-SHARE DATA
Net Asset Value, Beginning of Period .. $6.22 $5.98 $5.42 $5.00
-------- -------- -------- --------
Income From Investment Operations
Net Investment Income(3) ............ 0.06 0.15 0.14 0.10
Net Realized and Unrealized Gain
on Investment Transactions .......... 0.30 0.45 0.56 0.39
-------- -------- -------- --------
Total From Investment Operations .... 0.36 0.60 0.70 0.49
-------- -------- -------- --------
Distributions
From Net Investment Income .......... (0.06) (0.16) (0.13) (0.07)
From Net Realized Gain on
Investment Transactions ............. (0.21) (0.20) (0.01) --
-------- -------- -------- --------
Total Distributions ................. (0.27) (0.36) (0.14) (0.07)
-------- -------- -------- --------
Net Asset Value, End of Period ........ $6.31 $6.22 $5.98 $5.42
======== ======== ======== ========
Total Return(4) ..................... 6.14% 10.32% 13.02% 9.91%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets .................1.10%(5) 1.10% 1.10% 1.10%(5)
Ratio of Net Investment Income
to Average Net Assets .................2.08%(5) 2.38% 2.43% 2.52%(5)
Portfolio Turnover Rate ............... 58% 127% 119% 78%
Net Assets, End of Period
(in thousands) ........................$298,472 $261,721 $201,384 $57,836
(1) Six months ended May 31, 1999 (unaudited).
(2) February 15, 1996 (inception) through November 30, 1996.
(3) Computed using average shares outstanding throughout the period.
(4) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.
(5) Annualized.
- --------------------------------------------------------------------------------
UNDERSTANDING THE FINANCIAL HIGHLIGHTS--These statements itemize current period
activity and statistics and provide comparison data for the last five fiscal
years (or less, if the class is not five years old).
On a per-share basis, it includes:
* share price at the beginning of the period
* investment income and capital gains or losses
* income and capital gains distributions paid to shareholders
* share price at the end of the period
It also includes some key statistics for the period:
* total return--the overall percentage return of the fund, assuming reinvestment
of all distributions
* expense ratio--operating expenses as a percentage of average net assets
* net income ratio--net investment income as a percentage of average net assets
* portfolio turnover--the percentage of the portfolio that was replaced during
the period
See Notes to Financial Statements
www.americancentury.com 65
Strategic Moderate--Financial Highlights
- --------------------------------------------------------------------------------
(Continued)
FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED NOVEMBER 30 (EXCEPT AS NOTED)
<TABLE>
<CAPTION>
Advisor Class
1999(1) 1998 1997 1996(2)
PER-SHARE DATA
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period .. $ 6.22 $ 5.98 $ 5.42 $ 5.24
---------- ---------- ---------- ----------
Income From Investment Operations
Net Investment Income(3) ............ 0.06 0.13 0.12 0.02
Net Realized and Unrealized Gain
on Investment Transactions .......... 0.28 0.45 0.56 0.16
---------- ---------- ---------- ----------
Total From Investment Operations .... 0.34 0.58 0.68 0.18
---------- ---------- ---------- ----------
Distributions
From Net Investment Income .......... (0.05) (0.14) (0.11) --
From Net Realized Gain on
Investment Transactions ............. (0.21) (0.20) (0.01) --
---------- ---------- ---------- ----------
Total Distributions ................. (0.26) (0.34) (0.12) --
---------- ---------- ---------- ----------
Net Asset Value, End of Period ........ $ 6.30 $ 6.22 $ 5.98 $ 5.42
========== ========== ========== ==========
Total Return(4) ..................... 5.81% 10.07% 12.72% 3.44%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets ................. 1.35%(5) 1.35% 1.35% 1.35%(5)
Ratio of Net Investment Income
to Average Net Assets ................. 1.83%(5) 2.13% 2.18% 2.10%(5)
Portfolio Turnover Rate ............... 58% 127% 119% 78%
Net Assets, End of Period
(in thousands) ........................ $ 14,958 $ 13,251 $ 8,573 $ 7,566
</TABLE>
(1) Six months ended May 31, 1999 (unaudited).
(2) October 2, 1996 (commencement of sale) through November 30, 1996.
(3) Computed using average shares outstanding throughout the period.
(4) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.
(5) Annualized.
See Notes to Financial Statements
66 1-800-345-2021
Strategic Aggressive--Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED NOVEMBER 30 (EXCEPT AS NOTED)
Investor Class
1999(1) 1998 1997 1996(2)
PER-SHARE DATA
Net Asset Value, Beginning of Period .. $6.54 $6.25 $5.53 $5.00
-------- -------- -------- --------
Income From Investment Operations
Net Investment Income(3) ............ 0.04 0.10 0.09 0.07
Net Realized and Unrealized Gain
on Investment Transactions .......... 0.46 0.49 0.67 0.46
-------- -------- -------- --------
Total From Investment Operations .... 0.50 0.59 0.76 0.53
-------- -------- -------- --------
Distributions
From Net Investment Income .......... (0.08) (0.09) (0.04) --
From Net Realized Gain on
Investment Transactions ............. (0.17) (0.21) -- --
-------- -------- -------- --------
Total Distributions ................. (0.25) (0.30) (0.04) --
-------- -------- -------- --------
Net Asset Value, End of Period ........ $6.79 $6.54 $6.25 $5.53
======== ======== ======== ========
Total Return(4) ..................... 7.90% 9.93% 13.84% 10.60%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets .................1.20%(5) 1.20% 1.20% 1.20%(5)
Ratio of Net Investment Income
to Average Net Assets .................1.16%(5) 1.49% 1.58% 1.72%(5)
Portfolio Turnover Rate ............... 61% 134% 135% 64%
Net Assets, End of Period
(in thousands) ........................$161,433 $145,125 $109,497 $46,276
(1) Six months ended May 31, 1999 (unaudited).
(2) February 15, 1996 (inception) through November 30, 1996.
(3) Computed using average shares outstanding throughout the period.
(4) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.
(5) Annualized.
- --------------------------------------------------------------------------------
UNDERSTANDING THE FINANCIAL HIGHLIGHTS--These statements itemize current period
activity and statistics and provide comparison data for the last five fiscal
years (or less, if the class is not five years old).
On a per-share basis, it includes:
* share price at the beginning of the period
* investment income and capital gains or losses
* income and capital gains distributions paid to shareholders
* share price at the end of the period
It also includes some key statistics for the period:
* total return--the overall percentage return of the fund, assuming reinvestment
of all distributions
* expense ratio--operating expenses as a percentage of average net assets
* net income ratio--net investment income as a percentage of average net assets
* portfolio turnover--the percentage of the portfolio that was replaced during
the period
See Notes to Financial Statements
www.americancentury.com 67
Strategic Aggressive--Financial Highlights
- --------------------------------------------------------------------------------
(Continued)
FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED NOVEMBER 30 (EXCEPT AS NOTED)
Advisor Class
1999(1) 1998 1997 1996(2)
PER-SHARE DATA
Net Asset Value, Beginning of Period .. $6.52 $6.23 $5.53 $5.37
-------- -------- -------- --------
Income From Investment Operations
Net Investment Income(3) ............ 0.03 0.08 0.07 0.01
Net Realized and Unrealized Gain
on Investment Transactions .......... 0.46 0.49 0.67 0.15
-------- -------- -------- --------
Total From Investment Operations .... 0.49 0.57 0.74 0.16
-------- -------- -------- --------
Distributions
From Net Investment Income .......... (0.06) (0.07) (0.04) --
From Net Realized Gain on
Investment Transactions ............. (0.17) (0.21) -- --
-------- -------- -------- --------
Total Distributions ................. (0.23) (0.28) (0.04) --
-------- -------- -------- --------
Net Asset Value, End of Period ........ $6.78 $6.52 $6.23 $5.53
======== ======== ======== ========
Total Return(4) ..................... 7.81% 9.66% 13.43% 2.98%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets .................1.45%(5) 1.45% 1.45% 1.45%(5)
Ratio of Net Investment Income t
o Average Net Assets ..................0.91%(5) 1.24% 1.33% 1.31%(5)
Portfolio Turnover Rate ............... 61% 134% 135% 64%
Net Assets, End of Period
(in thousands) ........................$11,676 $10,228 $8,095 $5,872
(1) Six months ended May 31, 1999 (unaudited).
(2) October 2, 1996 (commencement of sale) through November 30, 1996.
(3) Computed using average shares outstanding throughout the period.
(4) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.
(5) Annualized.
See Notes to Financial Statements
68 1-800-345-2021
Share Class and Retirement Account Information
- --------------------------------------------------------------------------------
SHARE CLASSES
Two classes of shares are authorized for sale by the funds: Investor Class
and Advisor Class.
INVESTOR CLASS shareholders do not pay any commissions or other fees for
purchase of fund shares directly from American Century. Investors who buy
Investor Class shares through a broker-dealer may be required to pay the
broker-dealer a transaction fee.
ADVISOR CLASS shares are sold through banks, broker-dealers, insurance
companies, and financial advisors. Advisor Class shares are subject to a 0.50%
Rule 12b-1 service and distribution fee. Half of that fee is available to pay
for recordkeeping and administrative services, and half is available to pay for
distribution services provided by the financial intermediary through which the
Advisor Class shares are purchased. The total expense ratio of the Advisor Class
is 0.25% higher than the total expense ratio of the Investor Class.
Both classes of shares represent a pro rata interest in the funds and
generally have the same rights and preferences.
RETIREMENT ACCOUNT INFORMATION
As required by law, any distributions you receive from an IRA and certain
403(b) distributions [not eligible for rollover to an IRA or to another 403(b)]
are subject to federal income tax withholding at the rate of 10% of the total
amount withdrawn, unless you elect not to have withholding apply. If you don't
want us to withhold on this amount, you may send us a written notice not to have
the federal income tax withheld. Your written notice is valid from the date of
receipt at American Century. Even if you plan to roll over the amount you
withdraw to another tax-deferred account, the withholding rate still applies to
the withdrawn amount unless we have received a written notice not to withhold
federal income tax prior to the withdrawal.
When you plan to withdraw, you may make your election by completing our
Exchange/Redemption form or an IRS Form W-4P. Call American Century for either
form. Your written election is valid from the date of receipt at American
Century. You may revoke your election at any time by sending a written notice to
us.
Remember, even if you elect not to have income tax withheld, you are liable
for paying income tax on the taxable portion of your withdrawal. If you elect
not to have income tax withheld or you don't have enough income tax withheld,
you may be responsible for payment of estimated tax. You may incur penalties
under the estimated tax rules if your withholding and estimated tax payments are
not sufficient.
www.americancentury.com 69
Background Information
- --------------------------------------------------------------------------------
INVESTMENT PHILOSOPHY AND POLICIES
American Century offers 14 growth and income funds including domestic
equity, balanced, asset allocation, and specialty funds.
STRATEGIC ALLOCATION: CONSERVATIVE emphasizes bonds and money market
securities to provide regular income and principal protection. The fund also
provides the potential for moderate long-term growth by investing a portion of
its assets in stocks.
STRATEGIC ALLOCATION: MODERATE emphasizes common stocks for their long-term
growth prospects, but it maintains a sizable stake in bonds and money market
securities to provide some income and increase overall price stability.
STRATEGIC ALLOCATION: AGGRESSIVE focuses primarily on common stocks as a
source of long-term growth, but it maintains a small portion of its assets in
bonds and money market securities to provide a modest amount of income and help
cushion the share price volatility of the stock portion.
The risk designations are relative only to the three Strategic Asset
Allocation funds and do not represent comparisons with any other investment.
The funds invest in both domestic and foreign securities. International
investing involves special risks, such as political instability and currency
fluctuations.
COMPARATIVE INDICES
The indices listed below are used in the report as fund performance
comparisons. They are not investment products available for purchase.
The S&P 500 is composed of 500 large-capitalization stocks traded on
domestic exchanges. It is considered a broad measure of large-company stock
performance.
The S&P MIDCAP 400 is composed of 400 mid-capitalization stocks traded on
domestic exchanges. It is considered a broad measure of mid-sized stock
performance.
The S&P SMALLCAP 600 is composed of 600 small-capitalization stocks traded
on domestic exchanges. It is considered a broad measure of small-company stock
performance.
The S&P 500/BARRA VALUE INDEX and the S&P 500/BARRA GROWTH INDEX are
capitalization-weighted indices made up of the stocks from the S&P 500. The
value index contains firms with lower price-to-book ratios; conversely, the
growth index has firms with higher price-to-book ratios.
The LEHMAN AGGREGATE BOND INDEX reflects the combined performance of
several Lehman bond indices, including the TREASURY BOND, CORPORATE BOND, and
MORTGAGE-BACKED SECURITIES indices.
The MORGAN STANLEY EUROPE, AUSTRALASIA, FAR EAST (EAFE(reg.tm)) INDEX is a
widely followed group of stocks from 22 countries (excluding the U.S.).
The J.P. MORGAN GOVERNMENT BOND INDEX consists of government bonds from 12
countries (excluding the U.S.).
The THREE-MONTH TREASURY BILL INDEX is derived from secondary market
interest rates as published by the Federal Reserve Bank.
[left margin]
THE FUNDS' NEUTRAL ASSET MIXES*
CON MOD AGG
STOCKS 40% 60% 75%
BONDS 45% 30% 20%
CASH
(MONEY MARKET
SECURITIES) 15% 10% 5%
* The funds' actual asset mixes will vary from the neutral mixes based on
investment performance. Fund managers regularly review the portfolios and
rebalance the asset mixes to stay within the funds' preset operating ranges.
INVESTMENT TEAM LEADERS
PORTFOLIO MANAGERS
JEFF TYLER
BRIAN HOWELL
70 1-800-345-2021
Glossary
- --------------------------------------------------------------------------------
RETURNS
* TOTAL RETURN figures show the overall percentage change in the value of a
hypothetical investment in the fund and assume that all of the fund's
distributions are reinvested.
* AVERAGE ANNUAL RETURNS illustrate the annually compounded returns that would
have produced the fund's cumulative total returns if the fund's performance had
been constant over the entire period. Average annual returns smooth out
variations in a fund's return; they are not the same as fiscal year-by-year
results. For fiscal year-by-year returns, please refer to the "Financial
Highlights" on pages 63-68.
STOCK PORTFOLIO STATISTICS
* NUMBER OF COMPANIES -- the number of different companies held by a fund on a
given date.
* DIVIDEND YIELD -- a percentage return calculated by dividing a company's
annual cash dividend by the current market value of the company's stock.
* PRICE/EARNINGS RATIO -- a stock value measurement calculated by dividing a
company's stock price by its earnings per share, with the result expressed as a
multiple instead of a percentage. (Earnings per share is calculated by dividing
a company's after-tax earnings by its outstanding shares.)
BOND PORTFOLIO STATISTICS
* NUMBER OF SECURITIES -- the number of different securities held by a fund on a
given date.
* WEIGHTED AVERAGE MATURITY (WAM) -- a measurement of the sensitivity of a
fixed-income portfolio to interest rate changes. WAM indicates the average time
until the securities in the portfolio mature, weighted by dollar amount. The
longer the WAM, the more interest rate exposure and sensitivity the portfolio
has.
* AVERAGE DURATION -- another measure of the sensitivity of a fixed-income
portfolio to interest rate changes. Duration is a time-weighted average of the
interest and principal payments of the securities in a portfolio. As the
duration of a portfolio increases, so does the impact of a change in interest
rates on the value of the portfolio.
FIXED-INCOME SECURITY TYPES
* ASSET-BACKED SECURITIES -- debt securities that represent ownership in a pool
of receivables, such as credit card debt, auto loans, or mortgages.
* CORPORATE SECURITIES -- debt securities or instruments issued by corporations.
Short-term corporate securities are typically issued to raise cash and cover
current expenses in anticipation of future revenues; long-term corporate
securities are issued to finance capital expenditures, such as new plant
construction or equipment purchases.
* FOREIGN GOVERNMENT SECURITIES -- debt securities issued or guaranteed by
foreign governments or their political subdivisions. Some of these securities
are direct obligations of the issuing government; others are backed by some form
of government sponsorship.
* MORTGAGE-BACKED SECURITIES -- debt securities that represent ownership in
pools of mortgage loans. Most mortgage-backed securities are structured as
"pass-throughs"--the monthly payments of principal and interest on the mortgages
in the pool are collected by the bank that is servicing the mortgages and are
"passed through" to investors. While the payments of principal and interest are
www.americancentury.com 71
Glossary
- --------------------------------------------------------------------------------
considered secure (many are backed by government agency guarantees), the cash
flow is less certain than in other fixed-income investments. Mortgages that are
paid off early reduce future interest payments from the pool.
* U.S. GOVERNMENT AGENCY SECURITIES --debt securities issued by U.S. government
agencies (such as the Federal Home Loan Bank and the Federal Farm Credit Bank).
Some agency securities are backed by the full faith and credit of the U.S.
government, while others are guaranteed only by the issuing agency. Government
agency securities include discount notes (maturing in one year or less) and
medium-term notes, debentures, and bonds (maturing in three months to 50 years).
* U.S. TREASURY SECURITIES -- debt securities issued by the U.S. Treasury and
backed by the direct "full faith and credit" pledge of the U.S. government.
Treasury securities include bills (maturing in one year or less), notes
(maturing in two to ten years), and bonds (maturing in more than ten years).
FUND CLASSIFICATIONS
INVESTMENT OBJECTIVE
The investment objective may be based on the fund's objective as stated in its
prospectus or fund profile, or the fund's categorization by independent rating
organizations based on its management style.
* CAPITAL PRESERVATION -- Offers taxable and tax-free money market funds for
relative stability of principal and liquidity.
* INCOME -- Offers funds that can provide current income and competitive yields,
as well as a strong and stable foundation and generally lower volatility levels
than stock funds.
* GROWTH & INCOME -- Offers funds that emphasize both growth and income,
provided by either dividend-paying equities or a combination of equity and
fixed-income securities.
* GROWTH -- Offers funds with a focus on capital appreciation and long-term
growth, generally providing high return potential with corresponding high price
fluctuation risk.
RISK
The classification of funds by risk category is based on quantitative historical
measures as well as qualitative prospective measures. It is not intended to be a
precise indicator of future risk or return levels. The degree of risk within
each category can vary significantly, and some fund returns have historically
been higher than more aggressive funds or lower than more conservative funds.
Please be aware that the fund's category may change over time. Therefore, it is
important that you read a fund's prospectus or fund profile carefully before
investing to ensure its objectives, policies, and risk potential are consistent
with your needs.
* CONSERVATIVE -- these funds generally provide lower return potential with
either low or minimal price fluctuation risk.
* MODERATE -- these funds generally provide moderate return potential with
moderate price fluctuation risk.
* AGGRESSIVE -- these funds generally provide high return potential with
corresponding high price fluctuation risk.
72 1-800-345-2021
[inside back cover]
===============================================================================
INVESTMENT OBJECTIVE - CAPITAL PRESERVATION
===============================================================================
RISK LEVEL - CONSERVATIVE
TAXABLE MONEY MARKETS TAX-FREE MONEY MARKETS
Premium Capital Reserve FL Municipal Money Market
Prime Money Market CA Municipal Money Market
Premium Government Reserve CA Tax-Free Money Market
Government Agency Tax-Free Money Market
Money Market
Capital Preservation
===============================================================================
INVESTMENT OBJECTIVE - INCOME
===============================================================================
RISK LEVEL - AGGRESSIVE
TAXABLE BONDS TAX-FREE BONDS
Target 2025* CA High-Yield Municipal
Target 2020* High-Yield Municipal
Target 2015*
Target 2010*
High-Yield
International Bond
RISK LEVEL - MODERATE
TAXABLE BONDS TAX-FREE BONDS
Long-Term Treasury CA Long-Term Tax-Free
Target 2005* Long-Term Tax-Free
Bond CA Insured Tax-Free
Premium Bond
RISK LEVEL - CONSERVATIVE
TAXABLE BONDS TAX-FREE BONDS
Intermediate-Term Bond CA Intermediate-Term Tax-Free
Intermediate-Term Treasury AZ Intermediate-Term Municipal
GNMA FL Intermediate-Term Municipal
Inflation-Adjusted Treasury Intermediate-Term Tax-Free
Limited-Term Bond CA Limited-Term Tax-Free
Target 2000* Limited-Term Tax-Free
Short-Term Government
Short-Term Treasury
===============================================================================
INVESTMENT OBJECTIVE - GROWTH AND INCOME
===============================================================================
RISK LEVEL - AGGRESSIVE
DOMESTIC EQUITY
Small Cap Quantitative
Small Cap Value
RISK LEVEL - MODERATE
ASSET ALLOCATION/BALANCED DOMESTIC EQUITY SPECIALTY
Strategic Allocation -- Equity Growth Utilities
Aggressive Equity Index Real Estate
Balanced Tax-Managed Value
Strategic Allocation -- Income & Growth
Moderate Value
Strategic Allocation -- Equity Income
Conservative
===============================================================================
INVESTMENT OBJECTIVE - GROWTH
===============================================================================
RISK LEVEL - AGGRESSIVE
DOMESTIC EQUITY SPECIALTY INTERNATIONAL
New Opportunities Global Gold Emerging Markets
Giftrust(reg.tm) International Discovery
Vista International Growth
Heritage Global Growth
Growth
Ultra(reg.tm)
Select
RISK LEVEL - MODERATE
SPECIALTY
Global Natural Resources
The investment objective may be based on the fund's objective as stated in its
prospectus or fund profile, or the fund's categorization by independent rating
organizations based on its management style.
The classification of funds by risk category is based on quantitative historical
measures as well as qualitative prospective measures. It is not intended to be a
precise indicator of future risk or return levels. The degree of risk within
each category can vary significantly, and some fund returns have historically
been higher than more aggressive funds or lower than more conservative funds.
Please be aware that a fund's category may change over time. Therefore, it is
important that you read a fund's prospectus or fund profile carefully before
investing to ensure its objectives, policies and risk potential are consistent
with your needs.
For a definition of fund categories, see the Glossary.
* While listed within the Income investment objective, the Target funds do not
pay current dividend income. Income dividends are distributed once a year in
December. The Target funds are listed in all three risk categories due to the
dramatic price volatility investors may experience during certain market
conditions. If held to their target dates, however, they can offer a
conservative, dependable way to invest for a specific time horizon.
Please call 1-800-345-2021 for a prospectus or profile on any American Century
fund. These documents contain important information including charges and
expenses, and you should read them carefully before you invest or send money.
[back cover]
[american century logo(reg.sm)]
American
Century
P.O. BOX 419200
KANSAS CITY, MISSOURI 64141-6200
WWW.AMERICANCENTURY.COM
INVESTOR RELATIONS
1-800-345-2021 OR 816-531-5575
AUTOMATED INFORMATION LINE
1-800-345-8765
FAX: 816-340-7962
TELECOMMUNICATIONS DEVICE FOR THE DEAF
1-800-634-4113 OR 816-444-3485
BUSINESS, NOT-FOR-PROFIT, EMPLOYER-SPONSORED RETIREMENT PLANS
1-800-345-3533
AMERICAN CENTURY STRATEGIC ASSET ALLOCATIONS, INC.
INVESTMENT MANAGER
AMERICAN CENTURY INVESTMENT MANAGEMENT, INC.
KANSAS CITY, MISSOURI
THIS REPORT AND THE STATEMENTS IT CONTAINS ARE SUBMITTED FOR THE GENERAL
INFORMATION OF OUR SHAREHOLDERS. THE REPORT IS NOT AUTHORIZED FOR DISTRIBUTION
TO PROSPECTIVE INVESTORS UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE
PROSPECTUS.
- --------------------------------------------------------------------------------
American Century Investments BULK RATE
P.O. Box 419200 U.S. POSTAGE PAID
Kansas City, MO 64141-6200 AMERICAN CENTURY
www.americancentury.com COMPANIES
9907 Funds Distributor, Inc.
SH-SAN-17031 (c)1999 American Century Services Corporation
